HOLOSTICK INDIA LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) The issue involved in these two appeals is whether the product, manufactured by M/s. Holostick India Ltd., is classifiable under Heading No. 49.01 of the Schedule to the Central Excise Tariff Act as the product of printing industry as claimed by them or under Heading No. 39.19 of the Tariff as self -adhesive film as confirmed by the Commissioner under the impugned Order.

(2.) Shri V. Sridharan, learned Advocate, submitted that the Appellants Company manufactures security holograms and holographic films; that the art work prepared by artist and computer having logo/company buyers name, etc. is itched/transferred to glass plate having coating of lacquer with laser and optics; that then glass master is made; that by the process of electroforming, image on the nickel masters could be replicated/reproduced with the help of nickel sulphamate plating solution; that from Nickel Master, additional Nickel masters are made which are called "shims or production plates"; that by the process of embossing, the holographic effect of the Nickel shim is transferred on to the coated and metallised polyster PET film with the help of heat and pressure; that the reproduced shim is cut into the desired size and mounted on the main stamper roller with the help of screws; that the main stamper roller and two pressure rollers on the embossing machines are heated and the coated and metallised polyster film is passed in between the two successive pressure roller systems and holographic effect is automatically transferred on the film; that the lamination is the final process of holographed metallised polyster film with silicon coated release paper; that solvent base or water based acrylic pressure sensitive adhesive is used in this process for gumming cum lamination purposes; that the laminated material is thereafter cut into desired sizes; that the Commissioner, under the impugned Order, has classified the impugned product under Heading 39.19 as self -adhesive film relying upon HSN Explanatory Notes according to which the heading also includes articles printed with motifs, characters or pictorial representations which are not merely incidental to the primary use of the goods.

(3.) The learned Counsel, further, submitted that the impugned product is a product of printing industry as the printing of holographic effect is not merely incidental to the primary use of the goods (holograms); that the metallised and coated polyster film without printing is not called hologram and cannot be sold to customers; that hologram is a communicative product, containing image of the customer's company and the ultimate buyer of the product decides whether the product is genuine or not by looking at the hologram affixed on the product. He also mentioned that as per Note 2 to Chapter 49, "printed" also means reproduced by means of a duplicating machine, produced under the control of a computer, embossed, photographed, photocopied, thermocopied or typewritten."; that it is thus apparent that method adopted for transferring the holographic material on to the film is by way of embossment which comes under the term 'printed' for the purpose of Chapter 49 of the Tariff. He also referred to Explanatory Notes of HSN according to which 'self -adhesive printed stickers' fall under Heading 49.11 of HSN relating to "other Printed Matter, including Printed Pictures and Photographs." Reliance has been placed on the decision in the case of CCE, Bombay v. New Jack Printing Works (P) Ltd., 1999 (105) E.L.T. 440 (T), wherein printed hanger consisting of sheet of paper bearing picture of television set with bold letters 'Salura' printed has been classified under Heading 4901.90 as the essential character of the hanger that of a advertising display material was provided by the characters and letters printed on it. He further mentioned that the Supreme Court has reversed the decision in Metagraph Pvt. Ltd. v. CCE, 1986 (26) E.L.T. 66 (T) in Metagraphs P. Ltd. v. CCE, 1996 (88) E.L.T. 630; that similar decision in Johnson and Johnson Ltd. v. CCE - 1995 (78) E.L.T. 193 has been set aside by the Supreme Court in Johnson and Johnson - 1997 (94) E.L.T. 286 (S.C.).