By TIOL News Service

NEW DELHI, MAR 20, 2014: THE appellants are engaged in the printing of unlaminated poly films and printing laminated poly films and printing of unlaminated calendars on job work basis. As per the Revenue, the said activity of printing as also of printing and lamination amounts to manufacture and as such, the appellants were required to pay the duty on the same.

The appellant contended that as per various decisions of the Tribunal, the process of printing on film does not amount to manufacture. In the alternative, even if the printing is held to be amounting to manufacture, the final product would fall under Chapter 49, as a product of printing industry, which attract nil rate of duty.

Member (J) held that the issue as to whether the process of printing as well as on lamination of printed poly film amounts to manufacture or not has to be considered in the light of different judgements on the issue. However, prima facie it is to be viewed that even if the printing amounts to manufacture, the final product which emerges would be printing under Printing Industries Act, thus classifiable under Chapter 49 which attract nil rate of duty. Taking into consideration that a part of the demand would be within the limitation period and considering that the appellant has already deposited an amount of Rs.40 lakhs , the offer to further deposit of amount of Rs.20 lakhs as fair offer.

However, the Member (T) held that the appellant were not following the procedure of job work prescribed under Notification No. 214/1986-CE dated 25.3.1986. The jurisdictional Assistant Commissioner, Central Excise Division, Varanasi, has informed that the suppliers of raw materials have never given undertaking as provided under Notification No. 214/1986-CE. Accordingly, the goods manufactured by the appellant on so called job work basis, are not exempted from payment of duty.

Appellant's contention that the lamination does not amount of manufacture by relying upon the decision of Hon'ble Supreme Court in the case of (2004-TIOL-77-SC-CX) is not relevant to the facts of case. It has been held in that case that laminating/metalizing duty paid film does not amount of manufacture as the film remains a film and no new and distinct product comes into existence. As per facts of the present case, a new and distinct commodity comes into existence which is printed and laminated plastic film. Therefore, the piecemeal plea of the party that lamination does not amount to manufacture as final product is printed material exempt under chapter 49 is not at all sustainable in the facts and circumstances of the present case. Therefore, during the impugned period printing/printing and lamination of the plastic film amounts to manufacture because a new product having distinct name, character and use emerges. In view of the above, it is clear that balance of convenience is in the favour of revenue. Interest of justice shall be met if appellant are directed to make pre-deposit of Rs. 1.00 (one crore) as a condition for hearing the appeal in addition to Rs. 40 lakh already deposited during investigation.

In view of difference of opinion, the matter has been referred to the Third Member.

(See 2014-TIOL-423-CESTAT-DEL)