1. This is a revision filed before the Government of India which on transfer is being treated as appeal.
2. The appellants have a very special unit at their Colootola Factory for printing paper and paper board cartons which, according to them, is purely a specialised job of printing. They claim that the same is outside the scope and purview of Item 68. Even otherwise, in Notification 55/75-C.E., dated 1-3-75 it is mentioned at Sl. No. 13 as follows : "13. All products of the printing industry including newspapers and printed periodicals." The industry of making printed cartons by the appellants should be considered as nothing but "products of the printing industries". The cartons are made exclusively on orders received from the customers and "tailormade" as per their specifications. There is no finished product of commercial value and the goods are not "excisable goods" under Section 2(d) of the Central Excises and Salt Act, 1944. In revision Order No. 2057 dated 5-12-77, the Government of India held that cartons of similar and identical nature should be treated as products of the printing industry. The appellants who were paying duty sent a letter dated 31-3-78 to the Assistant Collector of Central Excise, Calcutta-72, alleging that clearances of such printed cartons till 31-3-78 should be treated as "paid under protest". With effect from 31-3-78, they undertook to file refund claims. The contentions of the appellants were rejected by the Assistant Collector. The appeal to the Appellate Collector was also dismissed on 7-5-81.
3. Shri Chandrasekaran, assisted by Shri Madhav Rao, appeared for the appellants, and pointed out that the products of the appellants should be treated as products of the printing industry and falling within the ambit of the Notification. According to him, the end-use of the products should not be the criterion. He relied on AIR 62 S.C. 1536 and pointed out that the dominant test should be applied and so far as this industry was concerned, it was printing, He argued that the notification should not be read as "exclusively engaged in specific industry of printing". According to the learned Counsel, the test should be whether the activity of printing was merely minor or -subsidiary or was substantial and dominating. He also produced samples of the cartons printed and urged that substantial amounts have been invested in the equipment and machinery mainly for printing. A flowchart was annexed to the grounds of appeal which sets out the process. White boards are cut into sheets by the Guillotine machine.
Thereafter Printing, Designing, Plate Making and Varnishing are effected and printing machine is used for the purposes. The material then passes to the stage of edge cutting and creasing. This process is carried out by the Punching or Shaping machine. Finally, the Forming and Gluing operations are carried out and this aspect is termed as Packaging Operation.
4. Shri Vineet Ohri, appearing for the department, pointed out that the Government of India order referred to by the appellants has since been reviewed in case reported as 1980 E.L.T. 646 (Vijay Flexible Panels Ltd., Bombay). It was held that only those products where printing virtually constitutes the culminating process of manufacture for obtaining the end-product could be called the "product of the printing industry" and judged by that criterion, the "printed cartons" were held to be not product of "printing industry so as to be eligible for exemption under Notification 55/75. He stated that the cost factor had no material relevance. Even if the test of predominant activity is applied in the present case, according to Shri Vineet Ohri, the products cannot be called a product of the printing industry.
5. We have carefully gone through the contentions raised by both the parties. Shri Chandrasekaran relied on the test of dominating activity.
According to him, the absence of the word "wholly" would lead to the inference that incidental and ancillary activities could also be involved in the manufacture. The order of the Government of India relied on by the appellants has been reviewed by a Full Bench of the Government of India in 1980 E.L.T. 646 mentioned Supra. In the case before us, admittedly, printing is but one of the activities carried on by the appellants. The product under scrutiny cannot be called "product of the printing industry" because what is manufactured is a product of the packaging industry, viz., cartons for purpose of packaging. The Exemption Notification contemplates products of printing industry. The notification also refers to newspapers and periodicals. Though the word 'including' is used, the enunciation of certain specific items would indicate that the intention of the Government of India is to exempt only those products which could be attributed to printing. Of course, even in respect of newspapers and periodicals, a certain amount of operations like cutting the paper and folding it, are also contemplated. But those activities are incidental and ancillary to the main industry. As laid down in 1981 E.C.R. p. 108, the printing industry has an identity of its own. Further, the Tariff Item does not make any distinction between a printed carton and a normal carton in respect of packing industry. The argument that a plain carton is a product of the packaging industry but a printed carton is a product of the printing industry is hardly convincing because a carton is after all a carton only which in common parlance is understood as a product of the packaging industry. So, the product manufactured by the appellants has been rightly classified as not relating to the printing industry. The appeal is. therefore, dismissed.