ITC LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal arises from Order -in -original No. 7/2002 dated 31.7.2002 passed by the CCE Chennai confirming demands on printed coated paper board, which was removed captively for manufacture of match inners/outers chargeable to NIL rate of duty.

(2.) THE allegation of the department is that the coated paper board had not discharged duty and the same was cleared for manufacturing the printed coated paper boards which were required to have been classified under chapter heading 4810.90 as against the declaration filed by the appellants for classification under chapter sub -heading No. 4810.10 of the tariff. While computing duty. the department has taken the printing charges and other charges which has brought into existence the printed coated paper board.

(3.) THE contention of the appellant is that the duty liability has to be worked out only on the coated paper board which was cleared for printing purpose. They also contend that the valuation adopted for the purpose for arriving at the value on coated paper board cannot be done on the basis of norms fixed under DEEC scheme but have to be taken separate norms of input/output ratio for manufacture of coated paper board wherein separate wastage quantity is arrived at. The consideration for fixing input/output norms for import of coated paper board wherein separate wastage quantity is arrived at. The consideration for fixing input/output norms for import of coated paper board is different and hence the value is also required to be re -worked out. They contend that the process of printing does not amount to a process of manufacture. Even otherwise if the said process amounts to manufacture, then in that event the item is required to be classified only under chapter sub -heading 4901.90 carrying NIL rate of duty. They contend that in that event the modvat is required to be extended on the printed coated paper board if it is presumed to be goods. However, they strongly urged that they are also liable to pay only duty on the coated paper on which duty had not been discharged which they are agreeable to pay. However, the valuation has to be reworked out including the percentage of duty which works out only to 20% and not 25% as has been charged.