Full Judgment Text
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PETITIONER:
M/S WARDEN & CO.(INDIA) PVT.LTD.
Vs.
RESPONDENT:
THE COLLECTOR OF CENTRAL EXCISE, THANE.
DATE OF JUDGMENT01/02/1995
BENCH:
SINGH N.P. (J)
BENCH:
SINGH N.P. (J)
AHMADI A.M. (CJ)
CITATION:
1995 SCC Supl. (1) 740 JT 1995 (2) 79
1995 SCALE (1)405
ACT:
HEADNOTE:
JUDGMENT:
1. This is an appeal under Section 35L of the Central
Excise and Salt Act, 1944 (hereinafter referred to as ’the
Act’).
2. The appellant has been manufacturing fibre drum, which
consists of a circular tube exclusively made out of paper or
paper-board.. The lid and the bottom are made of ply wood
which is reinforced with mild steel rings and clamps.
According to the appellant, in the total weight of the fibre
drum,the predominant weight is of the paper or paper board.
The same is the position in respect of value of the said
fibre drum, the predominant value being of the paper or
paper board. Commercially, it is known as a paper product.
3. The dispute is as to whether the fibre drum should be
classified under Item No. 17(4) as claimed by the appellant
or under the residuary Item No.68, which is the stand of the
Revenue. There is no dispute that prior to the Finance Act,
1982, it was classified under the residuary Item No.68. But
thereafter the appellant sought classification of the said
fibre drum under Item No. 17(4) and exemption under Noti-
fication No.66 of 1982. By an order dated 24.3.1982, the
Assistant Collector of the Central Excise, approved the
classification as sought by the appellant. The Trade Notice
No.49(MP) paper (2) 1982 dated 24.3.1982 (hereinafter
referred to as the ’Trade Notice’) in respect of Item No.
17(4) said:-
"sub-item(4) covers packing, transport,
storage, or sale of merchandise whether or not
having a decorative value, bags, canes,
packets, sacks, boxes, cartons, drums fitted
with reinforcing circular
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bands of other materials, tubular containers
for posting documents, garment bags, the like
are also covered under this subitem".
The Assistant Collector of Central Excise however, by an
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order dated 14.4.1982 called upon the appellant to file a
revised classification list classifying fibre drum under
Item 68, on the ground that as the fibre drum was not made
exclusively out of paper, it was not eligible for
classification under Item No. 17(4). In view of the letter
aforesaid, the appellant filed revised classification list
No.3/82 classifying the fibre drum under Item No.68 under
protest. The appellant addressed a letter dated 29.6.1982
representing its case that fibre drum was classifiable under
Item No. 17(4) and was not classifiable under Item No.68.
Ultimately-by an order dated 20.10.1982, the Assistant
Collector of Central Excise, held that Item No. 17(4) and
Notification No.66/82 were only applicable to such goods and
articles which were made exclusively out of paper or paper
board. Aggrieved by the said order, an appeal was filed
before the Collector of Central Excise (Appeals). The said
appeal was allowed on the finding that fibre drum was
classifiable under Item No.17(4). The Collector of Central
Excise (Appeals) referred to the composition of the fibre
drum and the aforesaid Trade Notice in support of his
finding.
4. The Revenue preferred an appeal before the Customs,
Excise & Gold (Control) Appellate Tribunal (hereinafter re-
ferred to as ’the Tribunal’). The Tribunal came to the
conclusion that the fibre drum manufactured by the appellant
was classifiable under Item No.68 of the Central Excise
Tariff and not under Item No.17(4). On that finding the
order of the Collector of Central Excise (Appeals) was set
aside.
5. On behalf of the appellant, it was urged that there
was no dispute that the fibre drum -manufactured by the
appellant is used as packing containers. The only dispute
is as to whether it is covered by Item No. 17(4), when apart
from paper or paper board, the lid and the bottom of the
said fibre drum are made of ply wood and to reinforce the
same a steel ring has been placed The relevant part of Item
No. 17 is as follows:-
"17. Paper and paper board, all sorts
(including paste-board, mill board, straw
board, cardboard and corrugated board), and
articles thereof specified below, in or in
relation to the manufacture of which any
process is ordinarily carried on with the aid
of power:-
(1) ............................
(2).......................................
(3).......................................
(4) Boxes, cartons, bags and other packing
containers (including flattened or TWENTY TWO
folded boxes and flattened or folded AND A
HALF cartons, whether or not printed and
PERCENT whether in assessmbled or unassembled
AD VALOREM condition."
On a plain reading, boxes, cartons, bags and other packing
containers manufactured from paper or paper board shall be
covered under Item No. 17 because paper, paper board and all
sorts including paste board, mill board, corrugated board
and articles thereof have been specified in clauses 1 to 4
of Item No. 17. It need not be pointed out that boxes,
cartons, bags and other packing containers, mentioned in
Item No.17(4) must have been manu-
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factured out of paper or paper board. But if just to
strengthen the packing container, a small piece of ply wood
or a steel ring is introduced, whether such packing contain-
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ers shall be out of the purview of Item No. 17(4)? The
Tribunal has referred to the details of the fibre drum by
saying that the cylinderical portion of the fibre drum is
made of paper and its bottom and top are of ply wood,
reinforced with mild steel ring and clamp. The Tribunal has
also mentioned in the impugned order that according to the
appellant, in terms of the percentage content, paper
constitutes 51.18% of the finished product, the plywood
content is about 23.57% and rings and clamps about 19.1/2%.
Even before this Court, there was no dispute, that the
percentage of the paper content is 51.18% only and the
remaining 48.82% consists of plywood, rings and clamps etc.
In this background, can it be said that the fibre drum which
is a container is made of "paper and paper board, -ill sorts
(including paste-board, mill board, straw board, cardboard
and corrugated board), -and articles thereof........for
being covered by tariff Item No. 17. Tariff Item No. 17 read
as a whole alongwith different sub-clauses makes it
abundantly clear that to be included in the said tariff
Item, the product must be of paper, paper board and all
sorts. How a product can be covered by the said tariff Item
No.17 including 17(4) if the paper or paper board
constitutes only 51.18% and the rest 48.82% consists of
plywood content, rings and clamps etc,?
6. On behalf of the appellant, it was pointed out that
internationally, composite paper board drums and containers
even when they are fitted with reinforcing circular bands of
other materials, other than paper, e.g. textile backings,
wooden supports, string handles, metal or plastic
corners,they are classified under heading 48.16 under
Customs Co-operation Nomenclature (CCCN - Brussels), which
is equivalent to Tariff Item No. 17(4).
7. The Glossary of Terms relating to Paper and Flexible
Packaging issued by Indian Standards Institution (IS :
7186 -1973) defines ’Fibre board Drum’ as "a shipping
package with cylindrical sidewall composed of paper or board
having disc ends of similar or different materials, such as
steel, wood etc." Thus, in spite of plywood discs at the top
and the bottom, the fibre drum is to be treated as a fibre
board drum, according to the Glossary of Terms relating to
Paper and Flexible Packaging issued by the Indian Standards
Institution. Whatever may be the classification by the
customs Co-operation Nomenclature (CCCN - Brussels), but
Tariff Item No. 17, including 17(4) clearly specify that
products covered by said Item No. 17 must be the product of
paper, paper board and all sorts.
8. On behalf of the Revenue, reliance was placed on the
judgment of this Court in the case of Geep Flashlight
Industries Ltd., v. Union of India, 1985(2) E.L.T. 3 (S.C.)
where this Court had to consider Tariff Item No.15A(2) which
read as under:
"Articles made of plastics, all sons, in-
cluding tubes, rods, sheets, foils, sticks,
other rectangular or profile shape whether
laminated or not, and whether rigid or
flexible including lay flat tubings and
polyinyl chlorides sheets......
In that connection, it was said:
"The learned Counsel Contended that the
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plastic torch manufactured by the petitioner
is nothing else but plastic tube made of
plastic in which certain other devices are
inserted so as to make it a torch but it
nonetheless retains the character of a plastic
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tube. A mere reference to Tariff Item No.
15A(2) would show that the articles therein
described are plastic material in different
shape and form and not articles made from such
plastic material. There is a noticeable
difference between plastic material in
different shape and form such as tubes, rods,
sheets etc. and articles made from such
plastic material such as plastic torch. It
would be doing violence to language if one
were to include plastic torch in articles
under Tariff Item No. 15A(2) on the ground
that a plastic tube is used for manufacturing
plastic torch. Articles such as tubes, rods,
sheets, foils, sticks etc. of plastic material
merely describe plastic material in different
shape and form and each word used therein
takes its colour from the word just preceding
and just succeeding and the adjectival clause
’articles made of plastics’. Articles made of
plastic meaning article made wholly of
commodity commercially known as plastics, and
not articles made from plastics along with
other materials.
(emphasis supplied)
9. The Tribunal has placed reliance on the judgment in the
case of M/s.Indian Textile Paper Tube Company Ltd. Madras
v. Collector of Central Excise, Madurai 1984(18)E.L.T.35,
where it was said that Vim Containers and Defence Containers
cannot be said to be articles of paper or paper board; they
are composite containers made of paper, paper board and
other metal components. The material components like lids
and bottoms were made of tin plates and black plates and
printed aluminium foils were added. Paper or paper board
was one of the raw materials. It was classified under Item
No.68 and not under Item No. 17(4), because it was held that
they cannot be held to be articles of paper or paper board,
in view of the lids and bottoms of such Vim Containers and
Defence Containers having been made of tin plates and black
plates with printed aluminium foils having been added. We
are informed that a Special Leave Petition filed against the
said judgment has been rejected by this Court. According to
us, there is not much difference in the components of Fibre
Drum from Vim Container and Defence Container. The Tribunal
has rightly come to the conclusion that such fibre drums
shall not be covered by Item No. 17(4) and they shall be
covered by residuary Item No.68.
10. Accordingly, the appeal is dismissed. The order of the
Tribunal is upheld. There will be no order as to costs.
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