Custom, Excise & Service Tax Tribunal
Alpha Carbonless Paper Manufacturing vs Appearance on 21 November, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.E/1415/11 (Arising out of Order-in-Original No.Belapur/03/BEL-II/R-IV/2011-12 dated 24/05/2011 passed by Commissioner of Central Excise, Belapur) For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
Commissioner of Central Excise, Respondent Belapur Vs Alpha Carbonless Paper Manufacturing Co. Pvt. Ltd., Appellant Appearance:
Shri.Shobha Ram, Comm. (AR) for appellant Shri.M.H. Patil, Advocate, for respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R.Chandrasekharan, Member (Technical) Date of Hearing : 21/11/2013 Date of Decision : /2013 ORDER NO Per: P.R.Chandrasekharan
1. This appeal filed by the Revenue is against Order-in-Original No.Belapur/03/BEL-II/R-IV/2011-12 dated 24/05/2011 passed by Commissioner of Central Excise, Belapur.
2. The respondent, M/s.Alpha Carbonless Paper Manufacturing Co. Pvt. Ltd. are manufacturers of excisable goods. They also manufactured printed ATM Rolls, printed lottery ticket rolls and printed bus ticket rolls. These products were classified by the respondent under CETH 49019900 of Central Excise Tariff attracting nil rate of duty by treating the products as products of the printing industry. The assessee availed Cenvat Credit on inputs used in the manufacture of both dutiable and exempted products and did not maintain separate accounts as per Rule 6 (3) (i) of Cenvat Credit Rules, 2004 at the time of clearance of the said products, the appellant cleared the said goods on payment of a sum @ 10%/8% of the value of the exempted goods. The department was of the view that the above products manufactured by the appellant merits classification under heading 48234000 as rolls, sheets and dials, printed for self recording apparatus and accordingly issued a show-cause notice dated January 2010 demanding excise duty of Rs.14,12,26,755/- for the clearances made during December 2005 to October 2010 proposing to classify the products under CETH 48234000. The said notice was adjudicated vide the impugned order and the adjudicating authority relying on the decisions of this Tribunal in the case of Gopsons Papers Ltd. Vs. CCE, Noida 2006 (202) ELT 313 (Tri-Del), Sai Security Printers Ltd., Vs. CCE, Fariadabad 2006 (199) ELT 121 (Tri-Del) and Metagraphs Pvt. Ltd. Vs. CCE, Bombay 1996 (88) ELT 630 (SC) dropped the proceedings. Aggrieved of the same, the Revenue is before us.
3. In their appeal memorandum it is contended that as per Note 12 to Chapter 48 except for the goods of heading 4814 or 4821, paper, paperboard, cellulose wadding and articles thereof, printed with motifs, characters or pictorial representations, which are not merely incidental to the primary use of the goods, fall in Chapter 49. It is the contention of the Revenue that printed ATM rolls used for recording the transactions made by the customers with the respective bank. Similarly, bus ticket rolls are used in hand held ticketing devises for issuing tickets to the passengers and printed lottery ticket rolls are used in lottery terminal machines for recording lottery numbers issued by the lottery centers. Thus, the primary use of the said printed rolls is for communicating the transactions made in the printed form to the customers by using various apparatus or machines. The printed ATM rolls, bus ticket rolls, lottery ticket rolls do not communicate anything to the customers unless the transaction is made and recorded by the apparatus/machines. Therefore, the primary use of products continues to remain recording of the transactions and therefore, they merit classification under Chapter 48 in terms of Note 12 to Chapter 48. It is further contended that similar products like, letter pads, receipt books which also contained similar printed information like name of the company, company logo, etc. as in the case of impugned goods is classified under Tariff Item 48201020 of the CETH. Similarly, continuous computer stationery, whether plain or inter-leaved with carbon and whether plain or printed with a EZR lines name or log of company or format of bills, order forms, gate pass, etc. continue to be classifiable under CETH 4820. Applying the same ratio, the impugned goods also attracts classification under Chapter 48 and not under Chapter 49. The tariff description of 48234000, namely, rolls, sheets and dials printed for self recording apparatus is more specific than the general description, printed matter and therefore, the impugned goods are classifiable under 48234000 as the said heading which is more specific has to be preferred over the general heading. The above goods are used in self recording machines, in the case of ATM rolls by simply entering PIN number and the amount to be withdrawn, the machine records the bank branch, date, time, ATM ID card Number, withdrawn amount, account number, opening balance, amount withdrawn and the closing balance and prints the same on the ATM rolls without giving any commands. Thus, the ATM automatically, records its own operations and could be termed as self-recording apparatus. Reliance placed by the Commissioner on the Gopsons Papers Ltd. case is not relevant as in the said case the question for decision was whether lottery ticket printed rolls made out of Jumbo rolls of thermal paper are classifiable under CETH 4901.90 as claimed by the department or under Central Excise Tariff 4911 as products of printing industry, whereas in the present case the competing entries are 48234000 and 49019900 of the Central Excise Tariff; therefore, the facts are different. Similarly in the case of Sai Security Printers Ltd. the appellant therein undertook the process of printing, cutting and slitting of imported thermal paper rolls to make printed lottery tickets, bus tickets, cheque books, demand drafts, etc. While the department sought classification under CETH 481190, the appellant in that case asked for classification under CETH 4901.90. The Tribunal which decided the matter accepted the classification under 4909.90 as products of the printing industry. In this case also the classification of the goods under CETH 48234000 was under consideration before the CESTAT and hence, the reliance placed by the Commissioner on the said decision is not relevant. In the case of Metagraphs Pvt. Ltd. case decided by the Honble Apex Court the issue for consideration was whether printed aluminium labels are products of the printing industry or not. The Honble Apex Court held that since the printing was not incidental to its use as printing brings into existence the labels the product was classifiable under 4901 as products of the printing industry. Similarly, the reliance placed by the Commissioner on the Circular No.11/91-CX dated 15/10/1991 is also incorrect, since the said circular dealt with printed products in sheet form, whereas in the present case the printed products are in roll form. Therefore, it is prayed that the impugned order be set aside.
4. The Ld. Commissioner (AR) appearing for the Revenue reiterates the grounds urged in the appeal memorandum and also relies on the decision of the Tribunal in the case of Surya Offset Vs. CCE, Ahmedabad 2011 (267) EST 516 (Tri-Ahmd) wherein it was held that the bank slip books with banks name, account holders name and number and amount to be deposited, BSNL forms not in manifold form or interleave carbon set, form and receipt of educational institutions with details of pupils, homework to be filed, admission forms and school leaving certificates and receipt book with name, address, sales tax registration, etc. are pre-printed stationery for which printing was incidental to their primary use and therefore, they are classifiable under Heading 48.20 of the Central Excise Tariff and not under Heading 49.11. Similarly, in the case of ITC Ltd. Vs. CCE, Madras 2004 (163) ELT 490 (Tri-Del) a question arose whether printed racks, printed top lid flats, printed hinged lid cutouts, which are used as parts/components of packets for packing of cigarettes is a product of the printing industry or merit classification under CTH 48.18 as packing material and it was held that the products should be classified as packing material under CETH 48.18 and not as product as printing industry under CETH 49.01. In the case of ITC Ltd. Vs. CCE, Madras 1998 (97) ELT 401 (SC) the Honble Apex Court held that paper/paper board articles for packaging of cigarettes which are printed would merit classification under 48 of the Customs Tariff as the primary use of the articles being in connection with packaging of cigarettes and printing thereon being merely incidental to their primary use. Again in the case of Graphic Charts Ltd. Vs. CCE, Bombay 2001 (135) ELT 1407 (Tri-Del), it was held that instrumentation charts used for purpose of recording temperature, pressure, humidity, etc. are classifiable under CETH 482390 and not as products of printing industry under CETH 490190. It was argued that in the present case also the ratio of these decisions would apply and the product merit classification under CETH 48234000 as rolled sheets and dials printed, for self recording apparatus. Accordingly, it he prayed that the impugned order be set aside and the appeal allowed.
5. The Ld. Counsel for the respondent on the other hand relies on the decision of this Tribunal in the case of Sai Security Printers Ltd. and Gopsons Papers Ltd. (cited supra) wherein it was held that lottery tickets, bus tickets, cheque books, demand drafts, etc. printed on thermal paper rolls and cutting/slot to size are classifiable under CETH 4901.90 as products of the printing industry. Similarly, lottery ticket printed rolls made out of Jumbo rolls of thermal paper were held to be the product of printing industry in Gopsons Papers Ltd. case (cited supra). In Metagraphs Pvt. Ltd. case the Honble Apex Court held that all products on which some printing is done are not products of printing industry. If printing brings into existence a product, the resultant product would be a product of printing industry. Nature of the product and other circumstances are relevant for determining whether a product is a product of printing industry or not. Applying this ratio, the Honble Apex Court held that printed aluminium labels are products of printing industry. Since the printing of the labels are not incidental to its use but primarily it communicates to the customer about the product and this serves a definite purpose. It is contended that the ratio of the above decision would apply in the facts of the present case. Reliance is also placed on the HSN explanatory notes applicable to heading 48.23. As per the said explanatory notes the said heading excludes lottery tickets, scratch cards, raffle tickets and tombola tickets which merit classification under CETH 49.11. Similarly, the HSN explanatory notes pertaining to CETH 49.11 specifically provides that certain printed articles may be intended for completion in manuscript or typescript at the time of use but remain in this heading provided they are essentially printed matter. Thus, printed forms, blanks multi-coupon travel tickets, circular letters, identity documents and cards and other articles printed with messages, notices, etc. requiring only the insertion of particulars are classified in this heading (49.11). Accordingly, it is contended that as per HSN explanatory notes also, the products merit classification under CETH 49.11 as product of the printing industry. It is further submitted that vide Finance Act, 2012, the Central Excise Tariff was amended specifically include the articles covered by the impugned order under Chapter 48 by inserting a Chapter Note 14, which reads as follows:
Notwithstanding anything contained in Note 12, if paper and paper products of heading 4811, 4816 or 4820 are printed with any character, name, logo, motif or format, they shall remain classified under the respective headings as long as such products are intended to be used for further printing or writing.
Thus, only with effect from the date of enactment of Finance Bill 2012, the impugned goods would merit classification under Chapter 48. The said amendment to Chapter 48 has not been given any retrospective effect. Since in the present case, the demand pertains to the period prior to 2012 , the classification of the goods under Chapter 49 is correct and valid. It is also argued that CETH 482340 applies to rolls, sheets and dials printed for self recording apparatus. Such self-recording apparatus would be of the nature of Barometer, ECG, magnitude meter, manometer, hydrographic, etc. which records the particulars without any external input. In the present case, the ATM needs external input such as PIN Number and the amount to be withdrawn. Similarly, in respect of lottery tickets and bus tickets, ticket number and date have to be incorporated. In the case of bus tickets, the details of boarding station and destination and ticket fare has to be incorporated. These are not automatically recorded and hence, ATM rolls, ticket rolls and lottery rolls, cannot be considered as paper or paper rolls for self recording apparatus. Accordingly, it is argued that the impugned order is correct in law and needs to be upheld.
6. We have carefully considered the rival submissions and also have perused the tariff entries. Competing tariff entries reads as follows:-
4823 - Other paper, paperboard, cellulose wadding and webs of cellulose fibres, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres.
4823.20 - Filter paper and paperboard 4823.40 - Rolls, sheets and dials, printed for self- recording apparatus .
49019900 reads as follows:
4901 - Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets 490110 - In single sheets, whether or not folded .
- Other
- 49019100 - - Dictionaries and encyclopedias, and serial installments thereof 49019900 -- Other...
6.1 From the HSN explanatory notes, it is seen that heading 4823 excludes products like lottery tickets, scratch cards, raffle tickets and tombolo tickets. Similarly, HSN explanatory notes to heading 4901 clearly shows that certain printed articles may be intended for completion in manuscript or typescript at the time of use but remain in this heading provided they are essentially printed matter. Thus, printed forms, travel tickets, circular letters, identity documents and cards printed with messages, notices, etc. requiring only the insertion of particulars, eg. dates and names are classified in this heading. The said notes further say that tickets for admission to places of entertainment tickets for travel by public or private transport or other similar tickets are also included in Chapter 49. From the explanatory notes, it is clear that the impugned goods, namely, ATM printed rolls, lottery ticket printed rolls and bus ticket printed rolls would merit classification under Chapter 49 as products of the printing industry. The decision of this Tribunal in the case of Gopsons Papers Ltd. and Sai Security Printers Ltd. (cited supra) also clearly held that lottery tickets, bus tickets, cheque books, etc. printed on thermal paper rolls and cut to size are classifiable under heading 4901.90 as products of the printing industry. In the case of Metagraphs Pvt. Ltd, the Honble Apex Court held that if printing brings into existence a product, the resultant product would be a product of printing industry. In the case before us, it is not in dispute that the printing on the thermal sheets/rolls of paper brought into existence, receipts for the ATM, lottery tickets and rolls for bus tickets. Therefore, printing is not merely incidental to the use of the product as such printing imparts a substantial character and quality to the product. It is true that while actually using, certain particulars are required to be entered in these rolls by the ATM or the lottery machine or in the bus ticket vending machine. Nevertheless the product is specifically meant to be used as ATM receipts, lottery tickets and bus ticket. It is the printing done on the thermal paper which has imparted these characteristics and therefore, it has to be held that printing is not merely incidental to the use of the products. Applying the ratio of the decisions cited supra, it becomes evident that the impugned goods prior to enactment of Finance Bills 2012 merit classification as products of the printing industry. Further, it is seen that in the Finance Bill 2012 a specific note 14 (supra) was inserted in Chapter 48 to bring within the scope of Chapter 48 certain products of the printing industry. The said amendment introduced by way of Note 14 to Chapter 48, was only prospective and was not given any retrospective effect. This itself indicate that prior to the insertion of Note 14 to Chapter 48, the impugned products merit classification under Chapter 49.
7. In the light of the above discussion, we are of the considered view that the impugned order does not suffer from any infirmity. Accordingly, we dismiss the appeal filed by the Revenue as devoid of merits.
(Pronounced in Court on ) (Ashok Jindal) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 12