COLLECTOR OF CENTRAL EXCISE, CHANDIGARHversusPUNJAB ANAND LAMP INDUSTRIES MOHALI (PUNJAB)

        COLLECTOR OF CENTRAL EXCISE, CHANDIGARH
                                                                                   A
                           v.
      PUNJAB ANAND LAMP INDUSTRIES MOHALi (PUNJAB)

                             SEPTEMBER 14, 1989

            [SABYASACHI MUKHARJI AND B.C. RAY, JJ.]                                B

            Central Excises and Salt Act, 1944: Section 2(f), First Schedule
     Tariff Item No. 17(3), 17(4) and Notification No. 66/82 dated 28th
     February'82, Notification No. 151/83 dated 13th May'83-Applicabi-
     lity of.

            Bulb sleeves and tube light sleeves for the purpose of packing
                                                                                   c
     electric bulbs and electric tube lights-Whether 'printed boxes and
     cartons'-Levy of excise duty.
I
•          The respondent was manufactnring printed both cartons and
     printed tube cartons for the purpose of packing electric bulbs and            D
     electric tube light. The Additional Collector of Central Excise held that
     the cartons manufactured by the respondent were classifiable under
     item No. 17 of the Central Excise Tariff Act and thus chargeable to
     excise duty. Accordingly an order was passed for demand of excise
     duly.
                                                                                   E
           The respondent filed an appeal before the Customs, Excise &
     Gold (Control) Appellate Tribunal. The Tribunal Bttowed the appeal
     by holding that (i) The product drums or sleeves manufactured by the
     respondent contd not be called 'box' or 'carton'; (ii) They were exemp-
     led from excise duty under the relevant notification.
                                                                                   F
           Hence this appeal by the Revenue.

           Dismissing the appeal, this Court,

           HELD: l. To consider the question whether the exemption notifi-
     cation was applicable or not iit view of its terms, it is necessary to find   G
     out whether these sleeves bulbs or sleeves or tube light sleeves
     manufactured for the purpose of packing the electric bulbs and tubes
     are printed box and cartons. [127E]

..         2. The Tribunal approached the question from the literal mean-
     ing as well as the functional use of the expressions employed. As these       H
                                         123
    124        SUPREME COURT REPORTS                [1989] Supp. 1 S.C.R.

A   sleeves and tube sleeves manufactured by the respondent had no inde-
    pe_ndent market as snch, and as these were utilised for captive consump-
    tion for the end prodnct manufactured by the respondent, in the
    absence of any positive and reliable evidence that there was either a
    market for these goods manufactured by the respondent, and in that
    market these bulb sleeves and tube sleeves are known and marketable
B   as corrugated boxes and cartons, a fact of which in the record, there is
    no positive evidence either way, the Tribunal proceeded on a correct
    basis. Therefore, the conclusion reached by the Tribunal cannot be
    assailed in this appeal. [I27F-i:I; 128B]

          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3097
    of 1989.
c
         From the Judgment and Order dated 15.3.1989 of the Central
    Excise and Gold (Control) Appellate Tribunal, New Delhi in Order
    No. 100/89-C in Appeal No. E/55/87-C.

D         K. Swami and P. Parmeswaran for the Appellant.

          The Judgment of the Court was delivered by

          SABYASACHI MUKHARJI, J. This is an appeal under section
    35L(b) of the Central Excises & Salt Act, 1944 (hereinafter referred to
E   as 'the Act') against the order dated 15th March, 1989 of the Customs,
    Excise & Gold (Control) Appellate Tribunal, New Delhi (hereinafter
    referred to as 'the Tribunal').

          The question for consideration in this appeal is, whether the bulb
    sleeves and tube light sleeves manufactured by the respondent for the
F   purpose of packing the electric bulbs and electric tube lights are
    'printed boxes and cartons' and are subject to excise duty or whether
    the respondent is entitled to exemption under notification No. 66/82
    dated 28th February, 1982, as amended by notification No. 151/83
    dated 13th May, 1983. The said amended notification reads as follows:

0               "GSR No.-In exercise of the powers conferred by sub-
                rule (1) of rule 8 of the Central Excise Rules, 1944, the
                Central Government hereby exempts articles of paper or
                paper board falling under sub-item (3) of Item No. 17 of
                the First Schedule to the Central Excises and Salt Act, 1944
                (1 of 1944), from the whole of the duty of excise leviable
H               thereon:
I                C.C.E . •v. PUNJAB.LAMP INDS. (MUKHARJI, J.]            125
I                     Provided that no such exemption shall apply to            A
                printed boxes and printed cartons (including flattened or
                folded printed boxes and flattened or folded printed
                cartons) whether in assembled or unassembled condition."

          The respondent was manufacturing printed bulb carton and
    printed tube carton falling under erstwhile Tariff Item No. 17(3) of the    B
    Central Excise Tariff. The revenue, it is alleged, ascertained that the
    sleeve rolls had a width of 17.5 ems. consisting of corrugated kraft
    paper on one side and plain paper on the other side having printed
    thereon the name monograms and so on pertaining to the lamps from
    the corrugated paper manufacturers. The rolls are mounted on a pack-
    ing machine and are cut to adequate length to circumscribe the lamps        c
    and the joint is automatically covered by gum tapes. The sleeves are
    conveyed automatically to a conveyer on which the lamps are inserted
    manually. Further the ends of the above sleeve are folded to prevent
    lamps from falling out. The entire machine is operated by means of
    electric motor. It is stated that it was further ascertained that for the
    florescent tubes the sleeves already cut to the proper length are sup-      D
    plied to the factory by outside manufacturers. The tube lamp is manu-
    ally put in and the sleeve edges folded over manually and gum tape is
    also applied manually. The tube lamp is inserted in the tube and then
    put in the outside card box packing. It is the case of the revenue that
    the respondent manufactured printed cartons for bulbs by way of
    printing on papers (printed and writing) and pasting the printed paper      E
    on the corrugated board and thus converting the said corrugated board
    to printing cartons. According to the revenue, this process of
    manufacture renders the carton having printing and paper pasting on
    the surface to make these manufacture in terms of section 2(f) of the
    Act and classifiable under Tariff Item 17(3) as aforesaid. According to
    the revenue, the exemption contained in the notification No. 66i82          F
    was not applicable as the notification exempted articles of paper and
    paper board falling under Tariff Item No. 17(3) except printing boxes
    and cartons from the duty. According to the revenue, the respondent
    manufactured and cleared bulb cartons (printed) and tube cartons
    during the period June, 1985 to 30th April, 1986 of the value of
    Rs.10,24,461.25 involving central excise duty to the tune of                G
    Rs.1,59,817.67 without applying for and obtaining a central excise
    licence for erstwhile Tariff Item No. 17 and without maintaining any
    statutory record thus wilfully suppressing and mis-stating the facts with
    the intention to evade central excise duty and thereby contravening
    provisions of the Act and the rules.
                                                                                H
    126        SUPREME COURT REPORTS               [1989] Supp. 1 S.C.R.

          A Show Cause notice was issued followed by a corrigendum and
A
    demand was made of Rs.1,59,817.57 under rule 9(2) of the Central
    Excise Rules, 1944 (hereinafter referred to as 'the said rules') as to
    why penalty should not be imposed on them under rule 173Q of the said
    rules for the various alleged contraventions under the provisions of the
    Act and the rules. Written submissions were made. By an order dated
B   24th November, 1986, Additional Collector of Central Excise,
    Chandigarh held that cartons bulb and light were manufactured by the
    respondents and were classifiable under item 17(3} of the erstwhile
    Central Excise Tariff Act and thus chargeable to excise duty. But the
    duty was liable to be reduced in view of the exemption notification
    No. 217/86 dated 2nd April, 1986 for the period 2.4.86 to 30.4.86. The
    Additional Collector therefore passed an order dated 24th November,
c   1986 for demand of duty of Rs.1,44, 158.12 from the respondent under
    rule 9(2) of the said rules and imposed a penalty of Rs.25,000 under
    rule 173Q. There was an appeal to the Tribunal. The Tribunal referred
    to Tariff Item 17 pertaining to paper and paperboard. Sub-item (4) of
    the said item reads as follows:
D
                "4. Boxes, cartons, bags and other packing containers
                (including flattened or folded boxes) and flattened or
                folded cartons, whether or not printed and whether in
                assembled or unassembled condition."

B       Tariff Item 17(4) makes a distinction between boxes, cartons,
  bags and other packing container. There can be no doubt, according to
  the Tribunal, that boxes, cartons and bags would also be packing con-
  tainers. Out of the various types of packing containers of paper and
  paper board, according to the Tribunal, only printed boxes and
  printed cartons are dutiable if we read notification 66/82 as already set
F out hereinbefore. The Tribunal was of the view that the boxes and
  cartons have a definite understanding. Reference was made to Shorter
  Oxford English Dictionary Vol. I where 'box' has been defined as "a
  case of a receptacle usually having a lid". In that view of the matter,
  according to the Tribunal, the product drums or sleeves manufactured
  by the respondent could not be called 'box' or 'carton'. Therefore, the
O Tribunal held that these will be exempt from excise duty under the
  aforesaid notification even assuming that the product is a container. In
  that view of the matter, the Tribunal did not go into the question of
  limitation which had been raised before it. The Tribunal, however,
  mentioned in the order that before the adjudicating authority, no men-
  tion had been made by the respondent regarding the fact that they
H were undertaking manufacture of drums and sleeves out of paper and
             C.C.E. v. PUNJAB LAMP INDS. [MUKHARH, J.]                 127

paper.board sheets purchased by them from the market inasmuch as,they
                                                                              A
had not filed 11ny classification list to that ef{ect which they were under
an obligation to do under the law. It was contended on behalf of the
respondent that the manufacturing of the drums and sleeves was
undertaken in manufacturing bale and, therefore, the revenue knew
its manufacturing. But this factor, the Tribunal held, is of no conse-
quence because in the system of Self Removal Procedure, the resp.on-          B
dent ·is not absolved of the responsibility of bringing the product
manufactured by them to the notice of the authonties ·even if'they are
using that product for their captive consumption. The respondent had
their responsibility. In the light of the Tribunal's findings on the ques-
tion of classification, the appeal of the respondent was allowed with
consequential relief. Revenue challenges the same in this appeal.
                                                                              c
       We have perused the order of the Tribunal. It is evi.dent that one
of the meanings, according to the Shorter Oxford English Dictionary,
Vol. I,, which the Tribunal had referred, is that box is 'a case of a
receptacle usually having a lid' and in view of the purpose for which
this is used in the transaction, the Tribunal found that drums or sleeves     D
manufactured by the respondent could not be called a 'box' or a
'carton' because the box must have a lid. The Tribunal noted that
sleeves by themselves could not contain anything because these are
open ended from both sides.

      In order to consider the question whether the exemption notifi- E
cation was applicable or not in view of the terms of the notification, it
is necessary to find out whether these sleeves bulbs or sleeves or tube
light sleeves manufactured for the purpose of packing the electric
bulbs and tubes are printed box and cartons. In our opinion, the Tri-
bunal approached the question from the literal meaning as well as the
functional use of the expressions employed. As these sleeves and tube F
sleeves manufactured by the respondent had no independent market
as such, and as these were utilised for captive consumption for the end
product manufactured by the respondent, in our opinion, in the
absence of any positive and reliable evidence that there was either a
market for these g.oods manufactured by the respondent and in thaJ
market these bulb sleeves aJld tube.sleeves are known and marketable G
as corrugated boxes and cartons, a fact of which in the record, there is
no positive evidence either way, in our opinion, the Tribunal pro-
ceeded on a correct basis. We have considered the submissions
advanced on behalf of the revenue. But we have not been able to
persuade ourselves to accept the contention that Tribunal committed
any_ error either on the principle of law to be applicable or the appreci- H
     128         SUPREME COURT REPORTS               [1989] Supp. 1 S.C.R.

A ation of the facts in this case.

             In the aforesaid view of the matter, the conclusion reached by
      the Tribunal cannot be assailed in this appeal. The appeal, therefore,
    , fails and is, accordingly, dismissed. There will, however, be no order
      as to costs.
B
     T.N.A.                                              Appeal dismissed..




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