Supreme Court - Daily Orders
M/S. Caprihans India Ltd. vs Commissioner Of Central Excise on 16 September, 2015
Bench: A.K. Sikri, Rohinton Fali Nariman
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 563/2006
M/S. CAPRIHANS INDIA LTD. Appellant(s)
VERSUS
COMMISSIONER OF CENTRAL EXCISE Respondent(s)
O R D E R
In the present case we are concerned with printed PVC sheets which have already borne duty of 25%, having been classified under Chapter 39 Heading 39.20, which deals with plastics and articles thereof. We are concerned here with two Assessment Years 1995-96 and 1996-97. It is an admitted position that classification in the previous year dated 1st March, 1994 has been accepted by the Department and duty has been charged only once and not twice over as sought to be charged at present. Various show cause notices have been issued relating to these two assessment years started from the show cause notice dated 18th March, 1996. The material part of the said notice reads as under:
“Whereas it appears, that M/s. Caprihans India Ltd;, 76, MIC Area, Satpur, Nasik-622007 (herein after called “THE SAID ASSESSEE”) manufacturer of excisable goods falling under Chapter 39,49,59 & 96 of C.Ex. Tariff Act, 1985.
Whereas it appears that the said assessee has Signature Not Verified mis-classified their product PRINTED PVC SHEETINGS Digitally signed by ASHWANI KUMAR Date: 2015.09.22 under S.H.4901.10 with NIL rate of duty instead it is rightly covered by S.H. 3920.39 with duty @ 25% 15:43:44 IST Reason:
Adv.
Whereas it further appears that the product is 2 same as plastic sheet duly printed with design.
These designs are not the pictorial representations. In other words, printing or design on plastic sheet is ancillary to its original case as plastic sheet. The printed design do not have fin value in excess of intrinsic value of plastic sheet. The product fetches value because same is plastic sheet and not for design printed on it. As such product is rightly covered by heading No. 39.20 and the classification is also supported by Section Note 2 to Section VII of Central Excise Tariff Act, 1985. The plastic sheets are not the products of Printing industry as incorrectly claimed by the assessee. Thus the said assessee have contravened the provisions of Rule 173B read with Rule 173F of Central Excise Rules, 1944.” A plain reading of the show cause notice makes it clear that it is not the Department's case that the product after printing has become a different product known to be Printed PVC Sheets. On the contrary the Department proceeds on the footing that the product after printing is the same as a plastic sheet – the only difference is it is duly printed with design and, therefore, its classification must remain within plastic industry Chapter i.e. Chapter 39 and does not get shifted to the printing industry Chapter i.e. Chapter 49.
Even the Assistant Commissioner in his order dated November 19, 1997 correctly proceeds on the footing that by mere printing, the fabric does not lose its original identity. However, despite this finding of the Assistant Commissioner, the Assistant Commissioner went on to levy excise duty twice over in respect of the same product, both times under Chapter 39 Heading No. 39.20.
The Commissioner (Appeals) by his order dated 30th March, 1999 allowed the assessee's appeal and stated that based on the Assistant Commissioner's finding that no different product except 3 the product under Chapter 39 Heading No. 39.20 emerges after printing, the resultant product could not be liable to duty again as no manufacture could possibly be said to have taken place.
This finding of the learned Assistant Commissioner was in the appeal filed by the Revenue overturned as follows:
“4. After hearing both sides, we find that the Tribunal, while disposing of the assessee's appeal involving the identical issue has, vide his order No.A/1286/WZB/2005/C-III dated 12.07.2005 has held that printing of sheets would amount to manufacturer, inasmuch as a new product having commercial identity of its own emerges. It is also seen that the respondents have also considered, at one point of time that the process undertaken by them amount to manufacture and, as such, a classification under Chapter 49 was filed.
5. We are in agreement with the above decision that the process of printing undertaken on the plain sheets result in emergence of a new identifiable product having different commercial identity inasmuch as plain and printed sheets cannot be held to be the same goods and as such, reject the said plea of the assessee.
9. It is also seen that the appellants are clearing printed plastic sheets to the market, in which case the duty is required to be paid on the assessable value of the printed sheets. However, at this stage, Ld. Advocate submits that they had already paid duty on the plain PVC sheets and they may be allowed the benefit of MODVAT credit of the same, while discharging duty on the printed sheets.
Inasmuch as the duty is being demanded on the printed sheets, we hold that the duty already paid on the plain sheets would be adjustable towards the final duty required to be paid by the respondents, for which purposes we remand the matter to the Assistant Commissioner for doing quantification. The revenue's appeal is thus allowed in above terms.” The findings in these paragraphs by the Tribunal have to be 4 set aside on the simple ground that they are beyond the show cause notice of the Revenue, which accepts the fact that at least in the present case, no new product emerges after printing and consequently, therefore, that cannot be said to be any manufacture. On this ground alone, we set aside the Tribunal's judgment and restore that of the Commissioner, making it clear that the classification of the product remains under Chapter 39 Heading No. 39.20.
The appeal is disposed of in the aforesaid terms.
......................J. [A.K. SIKRI] ......................J. [ROHINTON FALI NARIMAN] NEW DELHI;
SEPTEMBER 16, 2015.
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ITEM NO.101 COURT NO.14 SECTION III
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 563/2006
M/S. CAPRIHANS INDIA LTD. Appellant(s)
VERSUS
COMMISSIONER OF CENTRAL EXCISE Respondent(s)
Date : 16/09/2015 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Appellant(s) Mr. D.A. Dave, Sr. Adv.
Mr. U.A. Rana, Adv.
Ms. Mrinal A. Majumdar, Adv.
Mr. Vineet Mohan, Adv.
For M/s Gagrat & Co.
For Respondent(s) Mr. K. Radhakrishnan, Sr. Adv.
Mr. Arijit Prasad, Adv.
Ms. Aruna Gupta, Adv.
Mr. B.K. Prasad, Adv.
UPON hearing the counsel the Court made the following O R D E R The appeal is disposed of in terms of the signed order.
(Ashwani Thakur) (Renu Diwan)
COURT MASTER COURT MASTER
(Signed order is placed on the file)