Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Navneet Publications (I) Ltd on 14 January, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL Nos. E/820, 821/05-Mum E/CO-213, 212/05-Mum (Arising out of Order-in-Appeal No. BR/129-130/TH-II/2004 dated 14.9.2004 passed by Commissioner of Central Excise (Appeals), Mumbai-I) For approval and signature: Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. Ramesh Nair, Member (Judicial) ======================================================
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 :
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, Thane-II Appellant Vs. Navneet Publications (I) Ltd. Respondent Appearance: Shri V.K. Agrawal, Additional Commissioner (AR), for appellant Shri V.S. Sejpal, Advocate, for respondent CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) Date of Hearing: 14.1.2015 Date of Decision: 14.1.2015 ORDER NO Per: Ramesh Nair
The appeal is directed against order-in-appeal No. BR/129-130/TH-II/2004 dated 14.9.2004 passed by the Commissioner of Central Excise (Appeals), Mumbai-I, wherein the respondents appeals were allowed.
2. The fact of the case is that the respondent is engaged in the activity of cutting and slitting of various sizes of paper from paper roll purchased from paper manufacturing unit. The paper roll which is purchased by the respondent, falls under Chapter Heading 48.02. However, the cut paper was classified by the respondent under Heading 48.20 of the First Schedule to the Central Excise Tariff Act, 1985 and availed the benefit of exemption under Notification 10/2002 dated 1.3.2002. A show cause notice dated 5.4.2004 was issued wherein it was contended that the product merits classification under sub-heading 4802.90 whereas the assessee wrongly classified under Chapter Heading 4820.00, which is not eligible for exemption under Notification 10/2002 dated 1.3.2002. Accordingly, the show cause notice proposed to demand excise duty of Rs.4,58,883/- and interest under Section 11AB of the Central Excise Act, 1944 and penalty under Rule 25 of the Central Excise Rules, 2002. The adjudicating authority while adjudicating the show cause notice vide orders-in-original No. 169/2004 dated 30.5.2004 and No. 1370/2004 dated 13.8.2004 and, confirmed the demand and also imposed equal amount of penalty. The demand was confirmed under the finding that the product in question is classifiable under Chapter Heading 4802.90 and accordingly chargeable to central excise duty @ 16%. Aggrieved by the said order, the respondent filed appeal before the Commissioner (Appeals) who vide the impugned order allowed the appeal of the respondent, mainly holding that the cutting of paper from bulk roll into sheets does not amount to manufacture. While holding the same, the learned Commissioner (Appeals) relied upon various judgments of the Honble Supreme Court in the case of UOI vs. J.G. Glass Industries Ltd. reported in 1998 (97) ELT 5 (SC), CCE vs. Paper Products Ltd. reported in 2000 (115) ELT 277 (SC), Kores India Ltd. vs. CCE, Chennai reported in 2004 (174) ELT 7 (SC) and Tribunals decisions in the case of S.R. Tissue Pvt. Ltd. vs. CCE reported in 2001 (136) ELT 367 (T) and CCE vs. True Graphs Chart Pvt. Ltd. reported in 1999 (105) ELT 341 (T). Aggrieved by the said order of the Commissioner (Appeals), the Revenue is before us.
3. Shri V.K. Agrawal, learned Additional Commissioner (AR) appearing for the Revenue, submits that the respondent had classified the product viz. paper under Chapter sub-heading 4820.00 and claimed exemption under Notification 10/2002 dated 1.3.2002. Since the product of Chapter Heading 4820.00 is not covered by the said exemption Notification, the respondent was liable to pay duty. Accordingly, the original adjudicating authority had correctly confirmed the demand and imposed penalty. Therefore, the impugned order is not sustainable and deserves to be set aside.
4. On the other hand, Shri V.S. Sejpal, learned counsel appearing for the respondent/assessee, submits that though the respondent has classified the goods under Chapter Heading 4820.00 which is not correct as the respondents activity was confined to slitting and cutting of paper from paper roll to sheet form in foolscap size paper and similar paper, it is his submission that first of all this activity does not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944. In such case, irrespective of any wrong declaration of classification when the activity itself does not amount to manufacture, there is no question of demand of any excise duty. The learned counsel submits that the Commissioner (Appeals), by careful application of mind relying on various judgments of the Honble Supreme Court and of the Tribunal wherein the subject issue has been settled, allowed the appeal of the respondent. Therefore, the order being absolutely legal and correct does not require any interference and he prays for upholding the order of the Commissioner (Appeals).
5. We have carefully considered the submissions made by both the sides. As regards the fact that the respondent is engaged in the activity of conversion of paper sheet from paper roll by the process of cutting and slitting, mere cutting and slitting of paper roll and conversion into sheets does not change the identity of the paper. Therefore, this activity does not fall under the purview of manufacture as defined under Section 2(f) of the Central Excise Act, 1944. On this particular issue, much water has flown and by the judgments relied upon by the learned Commissioner (Appeals), the issue has been settled and the Honble Supreme Court and the Tribunal in those judgments have consistently held that cutting and slitting of paper roll into sheets of various sizes does not amount to manufacture.
6. In view of this undisputed fact and the issue being settled in various judgments as discussed above, we do not find any infirmity in the impugned order and the same is upheld. The Revenues appeals are dismissed accordingly. The cross objections filed by the respondent are also disposed of in above terms.
(Operative part pronounced in Court) (P.K. Jain) Member (Technical) (Ramesh Nair) Member (Judicial) tvu 1 6