ORDER
K. Sreedharan, J. (President)
1. This appeal has come before us on a reference made by a Bench of two Members. At the time when the case came before that Bench for hearing. Learned Counsel representing the appellant submitted that the issue identical to the one raised herein has been referred to a Larger Bench as seen in the reported decision, 1995 (80) E.L.T. 203 as Collector of Central Excise, Bombay v. Vijay Flexible Containers Pvt. Ltd. The case referred to a Larger Bench as per the above order was decided by a Bench of 5 Members as per Final Order 118/98-C, dated 6-3-1998 reported as Collector of Central Excise, Bombay v. Vijay Flexible Containers Pvt. Ltd., 1998 (100) E.L.T. 158. This case was not posted before the said Larger Bench. Hence it has come up before us.
2. Question decided by the earlier Larger Bench was in relation to classification of printed outer shells and slides and also hinged lid blanks (H.L. Blanks) under the then existing tariff entry. The classification lists considered by the Bench were those filed on 9-3-1982 and 22-3-1982. The period concerned in the case before us is March 1986. The classification was under the new Central Excise Tariff Act, 1985 which came into force with effect from 1-3-1986. Since the dispute relates to classification under the new Tariff Act for the subsequent period, we are of the considered opinion that the earlier Larger Bench decision will not bar re-examination of the issue by us. Of course, the said decision can have persuasive effect but it cannot be said that decision concludes the issue raised herein. Therefore, we are proceeding to consider the issue in the light of the arguments advanced before us.
3. Short facts necessary for proper understanding of the issue raised in this appeal are as follows :
Appellants manufacture printed shells, slides and Hinged Lid Blanks. On the introduction of the Central Excise Tariff Act, 1985, they filed two classification lists in respect of these goods. They sought to classify them under Chapter 48, Heading No. 48.18 and sub-heading No. 4818.19. Duty liability for the item under that heading was ‘nil’. Assistant Collector of Central Excise by his order dated 7th August, 1985 ordered classification of the said goods under sub-heading 4818.13, duty being 15% ad valorem. On the basis of that order they were remitting duty under protest. According to the appellant the goods manufactured are articles of paper/paper board and constitute a component of a packet. Hence they are classifiable under sub-heading 4818.19. Aggrieved by the order of the Assistant Collector, the appellant went in appeal before the Collector of Central Excise, Mumbai. For the subsequent period also appellant filed classification list on 4th March, 1987 classifying the goods under sub-heading 4818.19. Since the Department was insisting on the goods being classified under 4818.13, duty was being paid at the rate of 15% ad valorem under protest. By order dated 17th September, 1989 the Collector directed the Assistant Collector to issue show cause notice to the appellant, give an opportunity of being heard in person and to pass a speaking order on the issue. Accordingly the Assistant Collector issued notice and afforded the appellants opportunity to submit all their contentions. By Order-in-Original dated 25th April 1988 the Assistant Collector found that the goods manufactured are classifiable under Heading 4818.13 and approved the classification lists submitted by the manufacturer in March, 1986 and 1987. They challenged the above order before the appellate authority. That authority by Order-in-Appeal No. SKM-93/90-BII dated 30-3-1990 dismissed the appeal upholding the classification under 4818.13. The classification is under challenge.
4. As was the case in the earlier Larger Bench decision of this Tribunal reported in 1998 (100) E.L.T. 158 the goods that are manufactured by the appellants are printed shells and slides of the packet as also hinged lid blanks. It is the case of the appellant that these items are to be classified as 4818.19 and not as 4818.13. For proper understanding of this contention, reference has to be made to Chapter Heading 48.18. 48.18 relates to –
“Other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres”
Below these words, the following items are also mentioned.
“Cartons, boxes, containers and cases including flattened or folded boxes and flattened or folded cartons, whether in assembled or unassembled condition”
Tariff Heading 48.18 has six sub-headings as well. Third and fourth are relevant for our purpose for decision in this case. The third sub-heading 4818.13 deals with “Other printed cartons, boxes and cases. Tax liability is 35% ad valorem. The fourth sub-heading, i.e., 4818.19 deals with “Other”. The issue is whether the goods manufactured fall within the third one mentioned above or the fourth.
5. Outer shell manufactured by the appellant is open at both ends. Shell by itself cannot be regarded as a box or receptacle or a container. When the slide is inserted into the shell and the two ends of the slide are tucked inside the outer shell, it will serve the purpose as a box, receptacle or container. The H.L. Blank is a rectangular piece of printed paperboard cut at appropriate places. When that cut pieces are folded, adjusted and properly glued it assumes the appearance of a packet. When so used, H.L. Blank is nothing but a small box. These aspects are admitted before us, that is, printed shells along with slide and H.L. Blank when folded and adjusted are small boxes and they can be used as such.
6. According to common man in the trade as also in common parlance a carton remains a carton whether it is plain or printed. The mere fact that printing takes place on the carton will not make it a product of printing industry. When the card-board is cut, printed, creased and given the shape of a carton by using paste or gum it becomes a carton and no amount of printing on the paper by itself will make it anything other than a carton. In other words, printing carried on will not make the carton a product of printing industry. It will remain the product of packaging industry (vide a decision of the Supreme Court in Rollatainers Ltd. v. Union of India -1994 (72) E.L.T. 793. In Collector of Central Excise, Bombay v. Paper Print & Products Co. -1996 (88) E.L.T. 317 (S.C.) a question arose whether unwaxed printed paper cut into sheets and reels according to the needs of the customer for the purpose of being used as wrappers in packaging can be said to be a produce of printing industry. Their Lordships after affirming the decision in 1994 (72) E.L.T. 793 observed that material which is used for packaging purposes belonged to the packaging industry even if something is printed thereon. The goods manufactured by the appellant are admittedly utilised for packing cigarettes. Therefore, they are goods belonging to packaging industry.
7. Earlier Larger Bench of this Tribunal in 1998 (100) E.L.T. 158 observed –
“Respondent manufactures outer shells and slides from printed paperboard. Outer shell is open ended at both sides and cannot be regarded as a box or receptacle or container. Where the outer shell and slide are used to make a packet, it is not a packet simpliciter, but a cigarette packet. No packet as such comes into existence. Even accepting that a packet can be regarded as a box, since it does not come into existence as such, but comes into existence only as a packet of cigarettes, it cannot fall under erstwhile T.I. 17(4) Similarly, H.L. Blank is only a piece of printed paperboard and is not a receptacle.”
This observation was made basing on the decision of a learned Single Judge of High Court of Madras in Asia Tobacco Company Ltd. v. Union of India -1992 (58) E.L.T. 418 and the decision of a Division Bench of High Court of Delhi in Zupiter Printery and Anr. v. Union of India -1991 (34) ECR 7. The facts of the case decided by the Madras High Court show that the petitioner therein manufactured outer shell and inner slide at its own factory for the purpose of marketing its own brand of cigarettes, while in the case of ITC brands the inner slides alone are made in the petitioner’s factory. Without the shell as far as ITC brands arc concerned, no box was being manufactured. On these facts High Court observed :-
“Cigarettes are first put in the bundling paper and then placed in the slide. The slide along with the cigarettes is then inserted into the outer shell. The packet of cigarette is thus completed at a stage when cigarettes are already in it. It is not in dispute that at this stage of assembly, it is not only the packet which is assembled but a packet of cigarettes containing cigarettes therein. Thus if this assembly is to be treated as manufacture, the manufacture is not of a packet but of a cigarette packet containing cigarettes. Thus a cigarette packet cannot be subjected to duty twice over.”
8. A Division Bench of Delhi High Court in Zupiter Printery and Anr. v. Union of India – 1991 (34) ECR 7 considered the question whether outer shells of cigarette packets are classifiable under T.I. 17(4) of the Tariff then existed. The petitioner before their Lordships were manufacturing outer shells of the packet on printed sheets supplied by the manufacturer of cigarettes. They were not making slides. On those facts, the High Court took the view that outer shells of cigarette packets are neither boxes nor containers because they are open at both ends. These two decisions, namely of the learned Single Judge of the Madras High Court and of the Division Bench of the Delhi High Court cannot be of any assistance to us in deciding the issue before us. The appellants before us manufacture printed shells, slides and H.L. Blanks. The shells together with slides form box or packet, so also H.L. Blanks when folded, adjusted and glued assume the characteristics of a packet. When these packets are filled with cigarettes, they will be called cigarette packet. If they are filled with bidis, they will be known as bidi packets. Many other articles can be safely packed in these shells and slides as also H.L. Blanks if the user wants it to be so done. Depending on the contents the name may change but their characteristic as packet or container do not change. In the market jewellery boxes are available. They are so called because they can be utilised for keeping jewellery. Even without jewellery they continue to be known as jewellery box. Likewise, the goods manufactured by the appellant may be known as cigarette packets because cigarettes can be placed in it. So they are belonging to Packaging Industry and have to be classified accordingly.
9. Chapter Heading 48.18 shows that cartons, boxes, containers and cases can be in such form or in flattened condition. The printed shells, slides and H.L. Blanks are packed in flattened condition and sent to the customer who carries out the folding, adjustment and gluing of the same to make it usable as container. Since the goods are thus having the characteristics of box or container, they can be classified only as item falling under tariff sub-heading 4818.13 The attempt of the manufacturer to classify it under sub-heading 4818.19 is not warranted by the provisions of the Tariff Act. It, therefore, follows that the orders passed by the departmental authorities call for no interference.
10. The appeal fails and is accordingly dismissed.
