UNION OL INDIA Vs. ROLLATAINERS LIMITED

JUDGEMENT

(1.) the Union of India, assistant collector of central excise, and the superintendent of central excise, Bangalore, have preferred this appeal against the judgment and order of a learned single judge of this court (puttaswamy, j.,) Dated 11th of june, 1984 whereby the learned single judge quashed the order dated 15-9-1980 calling upon the respondent herein to file a classification list in respect of printed cartons manufactured by it under tariff item No. 68 for approval, and the two show cause notices, dated 24-9-1980, anncxurcs-g and h relating to two periods calling upon the respondent to show cause as to why it should not be required to pay a sum of Rs. 1,70,638-30 and Rs. 4,13,074-01 being the excise duly recoverable from the respondent under Rule 10 read with Rule 173-j of the central excise rules, 1944. The learned single judge has also issued a writ in the nature of mandamus directing the appellants to refund the excise duty collected from the respondent on the printed cartons for the period during which the exemption was in force on such manufactured article.

(2.) the question involved in the instant writappeal is whether the printed cartons manufactured by the respondent-company are products of printing industry and as such exempted from the payment of excise duty under notification No. 55/1975, dated 1-3-1975 as amended from time to time. There is no dispute that if the product of the respondent-company is found to be a product of the printing industry, it is entitled to the benefit of the exemption from payment of excise duty till 28th of february, 1983.

(3.) the relevant facts may be briefly stated thus:the respondent-company manufactures printed cartons at its factory a makali, nclamangala, Bangalore district it manufactures such cartons for important and reputed organisations as per their specifications and requirements. The respondent-company has specialised in the branch of the printing industry connected with the manufacture of printed cartons. According to the.rcspondcnl-company, printed cartons are known and understood in the trade as products of the printing industry and this is borne out by several extracts from various references and text books on the printing industry and printing techniques for diversified products of the printing industry. According to the respondent-company in the trade in general the entire manufacture of a printed carton from the stage of the purchase or receipt by a manufacturer of the appropriate quality of paper board to the ultimate finished product offered for sale i.e., printed cartons, is carried out by a manufacturer on printed presses and other supplementary machinery for cutting and creasing, folding and finishing the printed cartons in accordance with the specifications of its customers. The final product which comes out in the shape of a printed carton undergoes various stages in the process of manufacture. Firstly, the respondent-company exerts its skill and precision in designing the art work to be printed on the printed carton. Thereafter, the plate or the block is made, which involves the preparation of copper or aluminium plate depending on the printing method employed. The paper board on which the art work is to be printed is then handed in the printing room to attain the right degree of moisture and stretch so that the colours intended to be printed are correctly transferred and register themselves at the required place on the board. Thereafter, the art work is transferred to the prepared paper board. In the printing operation, printing defects have to be eliminated and some times changes are made according to the directions of the customer. This process involves several trial runs till the desired result is obtained. After the printing, process to improve the appearance of the printed cartons in accordance with the requirement of the customers, varnishing, embossing, bronzing or foil stamping operations are undertaken. The cutting and creasing operations follow to convert the printed sheets into shape and sizes required by customers. In the final stage, if the customer so requires, the printed cartons are subjected to gluing operation. If there is no such specific direction by the customers, the product is supplied unglucd in a fiat punched form. According to the respondent-company the dominant activity in the manufacture of a printed carton is the printing activity and the cutting, creasing operation and the gluing if so required is only supplementary. In the course of time, the printed carton has become a medium of advertising the products. The printed carton enables the manufacturer to enhance sale value or market appealof their goods. The art work is chosen so that the brand name and trade mark of the manufacturer is highlighted. The appearance and the usual impact of the printing on the printed carton are of supreme importance to both the manufacturer of the product to be sold in the printed carton and to the printer, and the same therefore occupies the major lime of the printer in the manufacture of the printed carton. It has therefore been contended by the respondent-company that printed cartons arc known and understood in the trade as products of the printing industry. Since that is how printed cartons are understood in common parlance, they earned the benefit of exemption under the notification in question.