Holding

Marker inks are classifiable under CSH 3215.10 and are exempt from excise duty; reliance on the HSN for their classification is improper.

Summary

Camlin Limited manufactures various inks, including marker inks and other inks used in pens. The Central Excise Tariff classifies "writing inks" under CSH 3215.10 (nil duty) and "other inks" under CSH 3215.90 (16% duty). The Tribunal, relying on the Harmonised System of Nomenclature (HSN), placed marker inks in the latter category, imposing duty. On appeal, the Supreme Court held that the HSN scheme is not aligned with the Indian Excise Tariff and cannot be used for classification; marker inks are used in marker pens, which are exempt from duty, and therefore fall under CSH 3215.10. The Court affirmed the nil‑rate classification for the other inks and set aside the Tribunal’s duty finding on marker inks. Consequently, the assessee's appeal was allowed and the revenue's appeals were dismissed.

Issues considered

The correct classification of marker inks under the Central Excise Tariff – whether they belong to CSH 3215.10 (writing inks) or CSH 3215.90 (other inks).
The propriety of relying on the HSN for classification when its entries diverge from the Indian Excise Tariff.
The legislative intent behind the exemption of pens and associated inks from excise duty.

Legislation cited

Central Excise Tariff Act, 1985

Subjects

central exciseclassificationwriting inkmarker inktariff interpretationHSNnil dutyexcise duty

Judgment

[2008] 12 S.C.R. 1223

CAMLIN LIMITED A
v.
COMMNR. OF CENTRAL EXCISE, MUMBAI
(Civil Appeal Nos. 4507-4508 of 2002)
I SEPTEMBER 3, 2008
B
_,. [ASHOK BHAN AND V.S. SIRPURKAR, JJ.]

Central Excise Tariff-Act, 1985 - Chapter Sub-Heading
3215.10 or 3215.90 - Marker inks, Camel fount drawing ink,
waterproof drawing ink, spl.drawing ink black, rapidugraph ink
black, designers' Indian ink black and sketching pen ink -
c
Classification of- Held: Inks other than marker inks are writing
inks - Thus, classifiable under CSH 3215.10 and exigible to
nil rate of duty - Marker inks are used in marker pens -
Hence, classifiable under CSH 3215.10 and exempt from
D
~
paymenr of excise duty - Tribunal erred ,in relying upon HSN
for classifying marker inks under CSH 3215. 90 - Entries under
HSN and Indian Tariff Entry are completely different - When
entries in HSN and the said Tariff are not aligned, reliance
cannot be placed upon H$N for classification of goods under
the said Tariff - Thus, order of tribunal to that extent is set E
aside - Interpretation of statutes.
Appellant-assessee is engaged in manufacturing of
various kinds of marker pens and sketch pens. With
regard to levy of excise duty, tribuna.I relying on HSN F
... -"' held that camel fount drawing ink, waterproof drawing
ink, spl.drawing ink black, rapidugraph ink black,
designers' Indian ink black and sketching pen ink
manufactured by assessee, were writing inks. They were
classifiable under CSH 3215.10 and exigible to nil rate of
G
~l duty. Marker inks not being writing inks, was classified
under residual entry-CSH 3215.90 and exigible to 16% of
excise duty. "

The questions which arose for consideration in these
1223 H
1224 SUPREME COURT REPORTS [2008] 12 S.C.R.

A appeals was with regard to the classification of writing
inks and marking inks manufactured and captively
consumed by assessee for exigibility to excise duty.
Allowing the assesse's appeal and dismissing the
Revenue's appeals, the Court
B
HELD: 1.1 The Indian Central Excise Tariff creates
two categories of "writing ink" and residuary entry of
"other". The HSN on the other hand creates categories
for "printing ink", "other" and then residuary entry of
c "other". From the reading of the extract of Chapter
Heading 32.15 of the HSN, it is evident that the scheme
l

and entry of HSN is completely different from Indian Tariff
Entry. When the entries in the HSN and the said Tariff are
not aligned, reliance cannot be placed upon HSN for the
purpose of classification of goods under the said Tariff.
0
[Paras 16 and.17] [1231,C; 1232,G]
1.2 HSN only described "ordinary" writing or
drawing inks in Category B. Even inks for ball point pens
are c1assified under residuary entry "other". The Indian
E Tariff classification puts "all" writing inks together. The
fact that all writing inks are considered same and together
can also be seen from the letter of the Finance Minister
and the trade notices referred to. As per scheme of HSN,
"printing inks" are classifiable under specific Chapter Sub
F Headings 3215.11 and 3215.19 of the HSN and are
described under Note "A". All the rest of the inks are
covered in residuary heading 3215.90 and are described
under Note "B" "ordinary writing or drawing inks" and
Note "C" "other inks". It may be noted that scheme of
G Indian Excise Tariff entry is completely opposite and
"printing inks" will fall under residuary entry of CSH
3215.90 and "writing or drawing inks" fall under specific
entry 3215.10. [Paras 19 and 20] [1233,B-E]
1.3 The assessee has. produced/filed the chemical
H composition of its products before the Tribunal. The
CAMLIN LIMITED v. COMMNR. OF CENTRAL 1225
EXCISE, MUMBAI

marking inks mentioned in HSN in Category C (4) are A
based on Silver Nitrate. The marker ink manufactured by
assessee admittedly "does not" contain Silver Nitrate.
[Para 18] (1232,H; 1233,A-B]
1.4 The findings recorded by the Tribunal insofar as
the inks other than marker inks that they were classifiable B
under CSH 3215.10 and exigible to nil rate of duty, is
accepted and is confirmed. The marker inks would be
classified under CSH 3215.10 as the same are used in
marker pens which are exempt from the payment of excise
duty. The tribunal erred in relying upon the HSN for the c
purpose of marker inks in classifying them under Chapter
Sub-Heading 3215.90 of the said Tariff. The tribunal failed
to appreciate that the entries under the HSN and the
entries under the said T~riff are completely different. One
of the factors on which the tribunal based its conclusion
is the entries in the HSN. Therefore, the said conclusion 0
~ in the order of the tribunal is vitiated. The order of the
tribunal that marker inks are exigible to pay duty would
fall under Chapter Sub-Heading 3215.90, is set aside. The
findings recorded by the Commissioner (Appeals) are
concurred with. (Paras 24, 26 and 27] (1234,F-G; 1235,A- E
C; 1235,D-E]
CIVIL APPPELLATE JURISDICTION : Civil Appeal Nos.
4507-4508 of 2002
From the final Judgment and Order No. Cl/1237-38/02-
~ WZB/2002 dated 30.4.2002 of the CEGAT, Western Regional F
Bench at Mumbai in Appeal Nos. E/2312-R/99-BOM & E/3179-
R/99-BOM
WITH
C.A. Nos. 1692-1693 of 2003 & 978 of 2005 G
I. Venkatanaraya, Aarohi Bhalla, Shekhar Sharma (for Ms.
Sujata Kurdukar), Alok Yadav (for M.P. Devanath), Vikas Sharma
and Neera Gupta (for B.V. Balaram Das) for the Appearing PartieS<'·
The Judgment of the Court was delivered by
H
1226 SUPREME COURT REPORTS [2008] 12 S.C.R.

A BHAN, J. 1. These three sets of appeals arise from a·
common judgment and order dated 30th April,_2002 passed by
the Customs, Excise & Gold (Control) Appellate Tribunal,
Western Zonal Bench at Mumbai (for short "the Tribunal").
2. The first set of appeals being C.A. Nos. 4507-4508 of
B 2002 has been filed by M/s. Camlin Limited (hereinafter referred
to as "the Assessee"), whereas the remaining two sets of
appeals being C.A. Nos. 1692-1693 of 2003 & C.A. No. 978
of 2005 have been filed by the Revenue.
c 3. The issues in these, appeals are regarding the
classification of the "writing inks" being manufactured and
captively consumed by.the assessee ~nd consequent demand
of duty thereon. The inkswith their constituents are:- ,.---

No. ·NAME OF THE INKS INGREDIENTS
D
1. 99-MARKER INKS i) KETONIC SOLVENT
ii) SOLVENT DYES
iii) BINDERS
FOUNT i) CARBON BLACK
-
2. 100-CAMEL
E DRAWING INK (PIGMENT)
ii) SHELLAC BINDER
iii) WATER & PRESERVA-
I TIVES

F 3. J7-CAMEL WATERPROOF i) CARBON BLl\CK
DRAWING INK (PIGMENT)
ii) SHELLAC BINDER
~

iii) WATER &
PRESERVATIVES
G 09-CAME~SPL. DRAWING
4. ~) CARBON BLACK
JNK BLACK (PIGMENT)
ii) SHELLAC BINDER
iii) WATER & PRESERVA-
TIVES
H
CAMLIN LIMITED v. COMMNR. OF CENTRAL 1227
EXCISE, MUMBAI [BHAN, J.]

5. 98- CAMEL RAPIDUG- i) CARBON BLACK A
RAPH lNK BLACK (PIGMENT)
ii) SHELLAC BINDER
iii) WATER &
PRESERVATIVES B
6. 75- DESIGNERS' INDIAN i) CARBON BLACK
INK BLACK (PIGMENT)
ii) SHELLAC BINDER
iii) WATER &
PRESERVATIVES c
7. 75A- DESIGNERS' INDIAN i) CARBON BLACK
'
INK BLACK (PIGMENT)

ii) SHELLAC BINDER D
iii) WATER &
PRESERVATIVES
8. 758- DESIGNERS' INDIAN i) CARBON BLACK
INK BLACK /
(PIGMENT)
E
ii) SHELLAC BINDER
iii) WATER &
PRESERVATIVES
,.9.. SKETCHING PEN INK i) ACID DYES
ii) BASIC DYES F
\

iii) FOOD COLOURS
iv) WATER
V) HYGROSCOPICA~EN.TS
(such as GLYCOLS) G

4. The finding of the Tribunal qua items mentioned at serial
nos. 2 to 9 in the above chart is that they are "writing inks" and,
therefore, exigible to nil rate of duty. With regard to the item at
serial no. 1, i.e., "marker ink", the Tribunal has held that the H
1228 SUPREME COURT REP.ORTS [2008] 12 S.C.R.

A same are not "writing inks" and, therefore, would be covered by J._

Chapter sub-heading 3215.90 and, consequently, exigible to
16% of excise duty. Chapter heading 32.15 reads as under:-

"32.15 Printing ink, writing or drawing ink and other inks,
s whether or not concentrated or solid.
3215.10 - Writing ink Nil t

3215.90 - Other 16%"
5. Initially, the department had approved the classification
C list submitted by the assessee. According to the assessee, as
the classification of the inks manufactured by the assessee
had been approved by the revenue, it neither collected any duty
from its customers nor claimed any Modvat. Subsequently, the
revenue challenged the said approved classification list.
D
6. The assessee manufactures various kinds of marker
pens and sketch pen sets. As per the CBEC Trade Notice
reported in (39) ELT-T6, it has been clarified that "marker pens",
Hi-liter pens, up-liners were "all" different categories of pens.
According to the assessee, since various types of inks
E mentioned aforesaid are used in one or other types of pens
which are instruments for writing such inks are to be considered
as "writing inks".
7. It is submitted that initially all types of inks falling under the
F aforesaid Chapter Heading no. 32.15 were chargeable to duty @
20%. Subsequently, w.e.f. 151 March, 1997, Chapter Heading no.
32.1-5 has been revised and accordingly "writing ink" is now
classifiable under CSH 3215.10 chargeable to duty at nil rate and
all varieties of ink other than "writing inks" are classifiable under
G CSH no. 3215.90 chargeable to duty@ 16%.
8. According to the assessee, the legislative intent of the ,.._
aforesaid amendment was that the units manufacturing pens
which are assessed to nil rate of duty should not be paying duty
on the inks filled/used in the pens. As the pens manufactured
H by the assessee are assessed at nil rate, the submission is
CAMLIN LIMITED v. COMMNR. OF CENTRAL 1229
EXCISE, MUMBAI [BHAN, J.]
-';
that the writing inks which are used in these pens are not exigible A
to the levy of duty. This submission is made on the basis of the
letter dated 28th May, 1997 written by the then Finance Minister
of India. The relevant extracts of the letter is as follows:-
"I have had the matter examined. The general rate
applicable to products falling under Chapter 32 of the B
Central Excise Tariff is 18% which is also the rate
applicable to artists' and students' colours. However, pens
and parts of pens have remained exempted from duty for
a long time. A demand was made that writing inks which
' fall in the same category of goods, may a/so be exempted c
from duty It was a/so argued that a factory producing
pens is required to pay excise duty on writing inks which
is anomalous. On examining these requests, we had
decided to exempt writing inks a/so from excise duty"
D
9. The aforesaid contentions of the assessee which were
taken in appeal were accepted by the Commissioner (Appeals)
vide his Order dated 28th of March, 1999. After referring to the
numerous dictionaries to ascertain the meaning of various terms,
it was held that: -
E
"In view of the above definition of the words "write" and
"writing" it reveals that the method by which the ideas are
transformed into symbols, characters, letters or words on
any surface including paper is to be considered as writing.
, -" ~
Accordingly Fountain pens, Marker Pens, Croquill Lettering F
(
Pens, Sketch Pens etc. are the instruments which are
being used for transforming the ideas into symbols,
characters, letters or words on paper and in that sense
these are definitely the instruments of writing.
Even if we see the uses of these instruments, we noticed G
-4
that they are of multipurpose uses viz. Marker Pens are
used for bold writing on notice board, packages, files,
envelopes, charts etc. as well the same can be used in
drawing also. The same case is with sketch pens, croquill
lettering pens also. It can be used for writing purposes H
1230 SUPREME COURT REPORTS [2008] 12 S.C.R.

.l
A also. Apart it is also important to note here that in the C.Ex
Tariff description unde_r heading 3215.00. It is mentioned
that Printing inks, Writing or Drawing ink and other inks.
The word "or" used in between Writing Ink and Drawing
Ink itself indicates that both types of inks are synonymous
B and they are one and the same. Seeing the ingredients of
both these types of inks also made it clear that they are
same. It is not the case of the Department that the ink
claimed by the appellants are printing ink or copying and
Lectrographic Ink or inks for duplicating machine or making
_,'"
c ink, It only suspects that, it is used in the instruments for
colouring, hiliting, sketching etc. which ultimately figuring
its possible classifications as drawing ink. As discussed
above even if we accept it as "Drawing Ink" it ultimately
falls in the same category of writing-ink."
D 10. The Commissioner (Appeals) accepted the contention
of the assessee that pens are not writing instruments. He further :>'.

classified all nine types of Inks manufactured by the assessee
as "writing ink". He also recorded in his order that he has
referred to HSN Chapter 32.15 and Circulars of the Department
E for the purposes .of passing the said Order.
11. Aggrieved by the said order, the respondent-
.Department filed an Appeal before the Tribunal. The Tribunal
partly set aside the aforesaid Order by relying on HSN and held
that two inks out of nine manufactured by the assessee being
F "marker inks and camiligraph (rapidograph) ink" will be ,....
~
assessed to duty under CSH 3215.90.
12. Aggrieved by the said Order dated 29th September,
2000 of the Tribunal, assessee filed Civil Appeal No. 387/2001
· in this Court whereby this Court remanded the case to the
G
Tribunal for a fresh decision. ·~

13. Tribunal vide its impugned order dated 30th April, 2002,
decided that eight out of nine inks manufactured by the
assessee will be considered as writing inks and rate of duty will
H be Nil. While for one ink being "marker ink", it held against the
CAMLIN LIMITED v. COMMNR. OF CENTRAL 1231
EXCISE, MUMBAI [BHAN, J.]

assessee. It was held that "ma·rker inks" have to be classified A
under residual entry CSH 3215.90 and is liable to pay duty at
the rate of 16%. The Tribunal relied on HSN to reach the said
conclusion.
14. Aggrieved against the Order of the Tribunal, three
sets of appeals have been filed, one by the assessee and two B
by the Revenue.
15. The Counsel for the parties have been heard at length.
16. The Indian Central Excise Tariff creates two categories
of "writing ink" and residuary entry of "other". The HSN on the C
other hand creates categories for· "printing ink", "other" and
then residuary entry of "other". For convenience, the relevant
extract of HSN is reproduced herein below:-
"EXTRACT OF CHAPTER HEADING 32.15
D
32.15- PRINTINK INK, WRITING OR DRAWING INK AND
OTHER INKS, WHETHER OR NOT CONCENTRATED
OR SOLID.
- Printing Ink:
E
3215.11 - Black
3215.19 - Other
3215.90 - Other
(A) Printing inks (or colours) are pastes of varying F
consistency, obtained by mixing a finely divided black
or coloured pigment with a vehicle. The pigment is
usually carbon black for black inks and may be
organic or inorganic for coloured inks. The vehicle
consists of either natural resins or synthetic polymers, G
dispersed in oils or dissolved in solvents, and
contains a small quantity of additives to impart desired
functional properties.
(B) Ordinary writing or drawing inks are solutions or H
1232 SUPREME COURT REPORTS [2008] 12 S.C.R.

A suspensions of a black or coloured material in water,
usually with the addition of gum and other products
(e.g. preservatives). These includes inks based on
iron salts, inks based on logwood extracts or on
synthetic organic colours. Indian ink, used mainly for
B drawing, consists usually of carbon black in
suspension in water (with the addition of gum Arabic,
shellac, etc.) or in certain animal glues.
(C) Other inks in this heading include:

c (1) Copying and hectographic inks (ordinary inks
thickened with glycerol, sugar, etc.).
(2) Inks for ball point pens.
(3) Inks for duplicating machines or for
impregnating ink-pads or typewriter ribbons.
D
(4) Marking inks (e.g. based on silver nitrate).
(5) Metallic inks (finely divided metals or alloys in
suspension in a solution of gum, e.g., gold, silver
or bronze inks).
E
(6) Prepared sympathetic or invisible inks (e.g.
based on credit chloride).
These products are generally in the form of liquids or
pastes, but they are also included in this heading
F when concentrated or solid (i.e. powders, tablets,
sticks, etc.) to be used as inks after simple dilution
or dispersion."
17. From the reading of the extract of Chapter Heading
G 32.15 of the HSN, it is evident that the scheme and entry of
HSN is completely different from Indian Tariff Entry. It is settled
law that when the entries in the HSN and the said Tariff are not
aligned, reliance cannot be placed upon HSN for the purpose
of classification of goods under the said Tariff.
H 18. The assessee has produced/filed the chemical
CAMLIN LIMITED v. COMMNR. OF CENTRAL 1233
EXCISE, MUMB~J [BHAN, J.]

composition of its prpogcts before the Tribunal as directed. As A
can be seen from the above, the marking inks mentioned in
HSN in Category C (4) are based on Silver Nitrate. The marker
ink manufactured by assessee admittedly "does not" contain
Silver Nitrate.
19. Further, HSN only described "ordinary" writing or 8
drawing inks in Category 8. Even inks for ball point pens are
classified under residuary entry "other". The Indian Tariff
classification puts "all" writing inks together. The fact that all
writing inks are considered same and together can also be
seen from the aforesaid letter of the Finance Minister and the C
trade notices referred to.
20. As per scheme of HSN, "printing inks" are classifiable
under specific Chapter Sub Headings 3215.11and3215.19 of
the HSN and are described under Note "A". All the rest of the .
0
inks are covered in residuary heading 3215.90 and are
described under Note "B" "ordinary writing or drawing inks"
and Note "C" "other inks". It may be noted that scheme of Indian
Excise Tariff entry is completely opposite and "printing inks" will
fall under residuary entry of CSH 3215.90 and "writing or drawing E
inks" fall under specific entry 3215.10.
21. The basic contention of the respondent-Department
for all practical purposes is that pens are not writing instruments,
because if the pens are writing instruments then obviously the
inks used in such pens manufactured by the assessee are F
writing inks.
22. The Tribunal took an extreme example of paint being
used as graffiti. The essential function of paint is to provide a
protective covering for building structures and use in graffiti is
incidental. While markers are described as pens by the G
Notification of the Department itself and marker inks are used
in the said pens - writing instruments, therefore, should be
classified as writing inks.
23. Insofar as the inks other than marker inks are
H
1234 SUPREME COURT REPORTS [2008] 12 S.C.R.

A , concerned, the Tribunal while deciding the same in favour of
the assessee has recorded the following findings: -
"We find no reasons and approve the ground taken by the
revenue that the u,nderstanding of the word "Writing Ink"
has to be restricted and the common parlance
B understanding of the same has to be considered, while
applying to classification under 32.1510. Therefore, when
we find that the law is well settled, that HSN notes, have
more than persuasive value especially when the headings
are full aligned with Central Excise Tariff, we have no
c hesitation to consider that the Sub classification of ink
undEfr 32.15 should be based on constituent material:
Material and evidence of end use and on "Writing
Instruments", "pens etc." relied upon on both sides are
found to be not relevant. Classification in the sub headings
D is to be made on the basis that "Writing Ink" as per the
HSN Head Notes under 32.15, extracted herein supra,
which indicate that ordinarily such inks, are based on water.
On considering the admitted position that except for the
ink type, named as "99-MARKER INKS" in the list of
E impugned inks before us, extracted in sub-para (a) above,
all other inks listed and under consideration, are acqua or
water based which would render them to be eligible for
classification under sub-heading 32.1510, except "99-
MARKER INKS" which not being water based would fall
F under residuary Head 32.1590."
24. We agree with the findings recorded by the Tribunal
insofar as the inks other than marker inks are concerned and
confirm the same. Insofar as, marker inks are concerned, we
are of the opinion that the marker inks would fall under CSH
G 3215.10 as the same are used in marker pens which are exempt
from the payment of excise duty.
25. The then Finance Minister in his letter dated 28th of
May, 1997 had clearly stated that pens and parts of pens have
H remained exempted from duty for a long time.
CAMI-IN LIMITED v. COMMNR. OF CENTRAL 1235
EXCISE, MUMBAI [BHAN, J.]
~
26. In our considered view, the Tribunal erred in relying A
upon the HSN for the purpose of marker inks in classifying
them under Chapter Sub-Hea~ing 3215.90 of the said Tariff.
The Tribunal failed to appreciate that the entries under the HSN
and the entries under the said Tariff are completely different. As
mentioned above, it is settled law that when the entries in the B
~ HSN and the said. Tariff are not aligned, reliance cannot be
placed upon HSN for the purpose of classification of goods
~
under the.said Tariff. One of the factors on which the Tribunal
' based its conclusion is the entries in the HSN. The said
conclusion in the· Order of the Tribunal is, therefore, vitiated G
and, accordingly, set aside. We agree with the findings recorded
by the Commissioner (Appeals).
27. For the reasons stated above, we dismiss the appeals
filed by the Revenue and accept the appeals filed by the
assessee. The Order of the Tribunal is confirmed insofar as D
.r
inks other than· marker inks are concerned. Whereas the Order
of the Tribunal insofar as it has come to the conclusion that
marker inks are exigible to pay duty would fall under Chapter
Sub-Heading 3215.90, is set aside. The marker inks would be
classifiable under CSH 3215.10. Partie-s to bear their own costs E
in all the appeals.
N.J. Civil Appeal Nos. 4507-4508 of 2002 allowed
and Civil Appeal Nos. 1692-1693 of 2003

,Ji.
and C.A. No. 978 of 2005 dismissed. F
,
i