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Muthuvel Industries Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)(5)LC2104Tri(Delhi)
AppellantMuthuvel Industries
RespondentCollector of Central Excise
Excerpt:
.....with the brand and description printed on the front page.the appellants claimed that the printed office files were products of printing industry attracting exemption from excise duty under notification no. 55/75-c.e. dated 1st march, 1975 (as amended). the concerned assistant collector rejected the claim of the appellants.2. aggrieved, the appellants filed an appeal before the appellate collector, central excise, madras who by his order-in-appeal no.2085/80 dated 20-11-1980 under c. no. v/68/31/80 also rejected the appeal filed by the appellants holding that files manufactured by the appellants fall under item 68 and are liable to duty. he observed as under : ".... the question whether these constitute products of the printing industry depends on the facts whether in respect of these.....
Judgment:
1. Briefly stated the facts of the case are that M/s. Muthuvel Industries (hereinafter called the appellants) manufacture, amongst other things, office files using tag or slip, lever arch files, fibre board files with the brand and description printed on the front page.

The appellants claimed that the printed office files were products of printing industry attracting exemption from excise duty under Notification No. 55/75-C.E. dated 1st March, 1975 (as amended). The concerned Assistant Collector rejected the claim of the appellants.

2. Aggrieved, the appellants filed an appeal before the Appellate Collector, Central Excise, Madras who by his Order-in-Appeal No.2085/80 dated 20-11-1980 under C. No. V/68/31/80 also rejected the appeal filed by the appellants holding that files manufactured by the appellants fall under item 68 and are liable to duty. He observed as under : ".... The question whether these constitute products of the printing industry depends on the facts whether in respect of these products printing virtually constitutes the culminating process of manufacture for obtaining the end product. Obviously, this is not the case in respect of files in question, inasmuch as even without printing these files become fully operative and useful as files.

Therefore, the files do not pass the test and it has to be held that they fall outside the purview of the products of the printing industry." 3. Not satisfied with the said order passed by the Appellate Collector the appellants filed a Revision Application before the Government of India, which now stands transferred to this Tribunal, to be heard as an appeal.

4. We have heard Shri K.P. Jagdeesan, Advocate for the appellants and Mrs. Zutshi, SDR for the department and gone through the record.

5. The question to be decided is whether office files with tags and office files with clips with the brand and description printed on the front page are liable to duty under item 68 or not.

6. Shri K.P. Jagdeesan, learned counsel for the appellants argued that before denying exemption benefit to the appellants under Notification No. 55/75-C.E., dated 1st March 1975 as amended, the department should have issued a show cause notice to the appellants. Non-issuance of show cause notice violates the principles of natural justice and on this ground alone the Order-in-Appeal is liable to be set aside.

7. The second point raised by Shri Jagdeesan is that the assessing authority who passed the Order-in-Original did not pass a detailed order rejecting the claim of the appellants. In the absence of a detailed order the appellants could not take up all the points before the appellate authority and it has resulted in the miscarriage of justice. On merits Shri Jagdeesan, the learned counsel for the appellants argued that the printed office files are products of the printing industry. He cited a decision of the Karnataka High Court in the case of Rollatainers Limited and Ors. v. Union of India (1984 ECR 1815) only for the purpose of drawing our attention towards the Encyclopaedia of 'How It's Made' edited by Donald Clarke wherein the meaning of the term 'Printing' has been given. In that treatise, the term 'printing' is defined thus : "A part from the obvious books, magazines and newspapers, the products of the printing industry are many and diverse. They include posters, banknotes, telephone directories, postage stamps, record sleever, wall papers, cartons, plastic containers and many other forms of packagirg." According to Shri Jagdeesan, as per the definition of the term 'printing' as given in the Encyclopaedia of How It's Made the printed office files with tags and clips are products of printing industry. He pointed out that calendar is also a product of the printing industry and exempt from payment of duty under Notification No. 55/75-C.E., dated 1st March, 1975.

8. Shri Jagdeesan, the learned counsel, advanced his arguments by saying that in the process of manufacture of the files, the cardboards are cut to various sizes without the use of power and the cut cardboards are subjected to the printing process. If the contention of the authorities below that the printing office files were not products of printing industry were to be accepted it would mean that the printing process done to the files has no significance which, in turn, would mean that the printed files according to the authorities are as good as non-printed office files. In that event the value of the printing process should have to be excluded from the total value of the printed product and the applicants should have been allowed the refund of the duty paid on the value of printing.

9. The last submission made by Shri Jagdeesan is that making the office files by cutting the cardboards is not a process of manufacture and therefore office files cannot be subjected to excise duty which can be levied only on the manufactured products. He submitted that the appellants manufactured cardboard files without the aid of power and subjected them to the printing process with the aid of power.

Considering these admitted facts, Shri Jagdeesan submitted, the process of printing should be considered as a manufacturing process and the product of the printing process would consequently attract exemption under Notification No. 55/75 as amended. The printed office files should either be considered as product of printing industry or a mere file without attaching any significance to the printed materials and the printing process, in which event, the files would attract exemption under Notification No. 179/77 as they come into existence as a complete and finished product at that stage without the aid of power. In any event, the appellants are entitled to the refund of the excise duty paid on the product printed office files.

10. Mrs. Zutshi, the learned departmental representative, countered the arguments of Shri Jagdeesan and drew our attention towards various decisions of the Government of India, various Benches of this Tribunal and even of the High Courts in support of her contention that only those products where printing virtually constitutes the culminating process of manufacture for obtaining the end product could be called the product of printing industry. According to her as far as these office files are concerned, even without printing materials on these files they become fully operative and useful as files. Printing is not essential to be used on the files. It is the brand name under which these files are being sold imparting no essentiality regarding use of these files. The files remain as files even without printing. The Government of India in its decision in the case of Vijay Flexible Containers Ltd., Bombay (1980 E.L.T. 646) categorically 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 printing industry. In that case it was held that the printed cart ons cannot be held as a product of the printing industry so as to be eligible for exemption under Notification No. 55/75 as amended. Special Bench 'D' of this Tribunal in the case of Card Board Box Manufacturing Co., Calcutta v. Collector of Central Excise, Calcutta [1984 (17) E.L.T. 494] also took the same view and held that Notification No. 55/75-C.E. dated 1st March 1975 exempts, amongst others, all products of the printing industry including newspapers and printed 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. The printing industry is an identity of its own.

11. She also submitted that the Single Judge decision of the Karnataka High Court in the case of Rollatainers Limited (supra) stands overruled by the Division Bench decision of the Andhra Pradesh High Court in the case of Golden Press v. Deputy Collector of Central Excise, Hyderabad reported in 1985 ECR 1001 (A.P.), wherein it has been held that cartons and cans are products of packaging industry and cannot be said to be products of printing industry exempt under Notification 55/75. She argued that the appellants cannot take an altogether new stand at this stage that making of file is not a process of manufacture. This stand has not been taken earlier. According to the appellants themselves printing work is done with the aid of power and therefore the printing should be taken as a manufacturing process. Making of the files and printing on it is integrated process of manufacture and the appellants cannot take up the stand that making of files is not a process of manufacture. Whether making of these files which are in dispute is a manufacturing process or not, it requires some facts to be proved, which cannot be done at this stage. According to her, periodicals and books are printing products which also include calendar but not office files. The appeal is liable to be dismissed.

12. It was a case where the appellants had sought exemption under a Notification and hence issuance of show cause notice on the part of the department was not at all required. The record shows that full opportunity of hearing was granted by the Appellate Collector and even the samples were examined by him and as such no miscarriage of justice has resulted in this case. The objections of the appellants are therefore, overruled.

13. On merits the entire case hinges upon the interpretation of Notification No. 55/75-C.E., dated 1st March, 1975 which exempts all products of the printing industry including newspapers and printed periodicals from payment of duty. Office files with tags and clips with the brand and description printed on the front page are the products in dispute and they cannot be said to be products of the printing industry as claimed by the assessee. Only those products where printing virtually constitutes the culminating process of manufacture for obtaining the end product can be called the product of printing industry and judged by this criterion office files with tags and office files with clips with the brand and description printed on the front page cannot be held as a product of the printing industry so as to be eligible for exemption under Notification No. 55/75 as amended. The decision of the Government of India in the case of M/s. Vijay Flexible Containers Ltd. (supra) is very much relevant on this point. Even the definition of 'printing' as given in the Encyclopaedia of 'How It's Made' edited by Donald Clarke upon which the learned counsel for the appellants have put much reliance does not support the case of the appellants. In that Encyclopaedia the definition of the term 'printing' has been given as under : "Apart from the obvious books, magazines and newspapers, the pro- ducts of the printing industry are many and diverse. They include posters, bank notes, telephone directories, postage stamps, record sleever, wall papers, cartons, plastic containers and many other forms of packaging." Nowhere it mentions that office files with tags and office files with clips with the brand and description printed on the front page are the product of printing industry as claimed by the assessee. Files remain as files even without printing because the files without printing remain fully operative and useful as files and they fall outside the purview of printing industry. The Appellate Collector has rightly observed that the printing of the brand name etc. is one of the processes used in the manufacture of the files and it cannot be said to be a product of the printing industry. The printing is done with the aid of power as admitted by the appellants and they cannot take up this stand now that they are entitled to take the benefit of exemption Notification No. 179/77- C.E., dated 18-6-1977. Relying upon the decision of the Special Bench 'D' of this Tribunal in the case of Card Board Box Manufacturing Co. [1984 (17) E.L.T. 494] and that of the Government of India in the case of M/s. Vijay Flexible Containers Ltd. (1980 E.L.T. 646) and that of the Division Bench decision of the Andhra Pradesh High Court in the case of Golden Press v. Deputy Collector of Central Excise, Hyderabad (1985 ECR 1001) we confirm the findings of the authority below and dismiss this appeal.


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