Customs, Excise and Gold Tribunal - Delhi
Azad Tin Factory (P) Ltd. vs Collector Of Central Excise on 9 October, 1992
Equivalent citations: 1993ECR52(TRI.-DELHI), 1993(64)ELT78(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The classification of printed, lacquered, varnished tin sheets manufactured by the appellants, whether under Heading 7212.30 of the Central Excise Tariff Act, 1985 as claimed by the appellants or under Heading 7212.90 as confirmed by the Department, and the eligibility of these items to the benefit of exemption in terms of Notification 202/88-C.E., dated 20-5-1988 arise for determination in this appeal.
2. The appellants are engaged in the manufacture of containers of base metal other than aluminium and they carry out job work of lacquering/varnishing and printing of tin sheets. The job work of printing on tin sheets is done as per the customers design and the process of printing on plain sheets is similar to the process of off-set printing on paper. The positive of the design and the matter to be printed is supplied to the appellants by their respective customers and the same is converted into Plate for printing on offset printing machine. The printed tin sheets are then varnished and coated as per the customers' requirement. The major work of printing is carried out for Indian Oil Corporation and Hindustan Petroleum. The appellants filed classification list effective from 1-4-1990 wherein they classified printed tin sheets under Heading 7212.30 and claimed exemption from payment of the whole of the duty of excise leviable thereon as per Notification 202/88. While the classification lists were pending approval by the Department show cause notices dated 8-5-1990 and 27-8-1990 were issued to the appellants proposing levy of duty of over Rs. 23 lakhs on the ground that the printed tin sheets are correctly classifiable under Heading 7212.90 attracting duty @ 15% ad valorem as basic duty and 5% ad valorem as special excise duty (The period involved in this appeal is from 1-4-1990 to 27-8-1990). The appellants replied to the notices stating inter alia that as per Section 2(f)(ii) of the Central Excises and Salt Act, 1944 the process of printing is not a process of manufacture unless the said Tariff Item mentions the said process and Heading 7212.30 does not mention the process of printing. The adjudicating authority upheld the classification under Heading 7212.90 and confirmed the demand. The lower appellate authority upheld the order of the Assistant Collector, holding that the intention of the Legislature as is evident from a plain reading of Notification 202/88 was to give benefit to painted/lacquered/varnished or plastic coated sheets falling under Heading 7210.30 or 7212.30 and not to sheets on which the process of printing was also carried out. Hence this appeal.
3. The definition of manufacture as per Section 2(f) of the CESA, 1944 after introduction of CETA, 1985 is as follows :
" 'manufacture' includes any process -
(i) incidental or ancillary to the completion of a manufactured product and
(ii) which is specified in relation to any goods in the Section or Chapter Notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture".
4. We see force in the appellants' contention that as per Clause 2(f)(ii) unless the process of printing is included in the description and definition of the Tariff Item, such process will not amount to a process of manufacture and, therefore, no duty is leviable on such process. The word "printing" is not mentioned in the description/definition of products falling under Heading 7212.30 and, therefore, the process of printing will not amount to a manufacturing process attracting central excise duty. On the other hand, in respect of aluminium foils, the process of printing is included in the definition in Chapter 76. We also take note of the fact that the Government of India, Ministry of Finance has clarified by its letter dated 12-4-1989 that the printed sheets would be covered by the entry pertaining to painted/lacquered/varnished sheets. This is further borne out by Trade Notice No. 62/91 dated 19-8-1991 which is reproduced below:
"Trade Notice No. 62/91 dated 10th August 1991 Sub : Printed Tinned Sheets of Ch. 72 - Eligibility for exemption - Notification No. 174/88 - Clarification regarding ...
Doubts have been expressed whether printed tinned sheets should be covered by the expression "painted, lacquered, varnished or plastic coated sheets", occurring in Notification No. 94/88-C.E., dated 1-3-1988,174/88-C.E., dated 13-5-1988, 202/88-C.E., dated 20-5-1988.
2. The matter has been examined. It is learnt that printed tinned sheets are always varnished after printing. Products subjected to more than one processes of coating such as painting, varnishing, cladding etc. are to be classified according to the last process involved. As printed tinned sheets on account of the printing on them giving them their essential characteristics are subjected to varnishing as the last process, these are to be regarded as 'varnishing sheets', falling under Heading 7210.30. As 'varnished sheets' they would be entitled to the benefit of exemption Notification Nos. 94/88-C.E., 174/88-C.E. and 202/88-C.E. Similarly where the width of the sheets does not exceed 600 mm, and are classifiable under Heading 7212, the sub-heading 7212.30 would inter alia cover tinned sheets which have been painted, lacquered, varnished or plastic coated as the last process and these would be eligible for exemption under Notification Nos. 174/88-C.E. and 202/88-C.E.
3. Accordingly, it is clarified that the expression 'painted, lacquered, varnished or plastic coated sheets' would also cover inter alia tinned sheets subjected to a process of printing and varnishing. They would be classifiable under Heading 7210.00/7212.00 (sub-heading 7210.30 or 7212.30) and would be eligible for benefit of Notification Nos. 94/88-C.E., dated 1-3-1988, 174/88-C.E., dated 13-5-1988 and 202/88-C.E., dated 20-5-1988.
4. All the Trade Associations concerned are requested to bring the contents of this Trade Notice to the attention of member manufacturers in particular and the trade in general."
5. In the light of the above discussion we hold that the printed/lacquered/varnished tin sheets fall for classification under Heading 7212.30 of the CETA, 1985. We also hold that the sheets in question are eligible to the benefit of exemption in terms of Notification 202/88 dated 20-5-1988 as amended by Notification 218/88 dated 21-6-1988 against clause 5 thereof, as final products mentioned in Col. 3 of the notification viz. "painted/lacquered or varnished sheets falling under sub-heading 7210.30 or 7212.30" are made out of duty paid inputs specified in Col. No. 2 thereof viz. "sheets including tinned sheets".
6. In the result we set aside the impugned order and allow the appeal with consequential relief, if any, due to the appellants.