COMMNR. OF CENTRAL EXCISE, MEERUT-IIversusM/S. SUNDSTRAND FORMS P. LTD.

                        [2011) 10 S.C.R. 764


A         COMMNR. OF CENTRAL EXCISE, MEERUT-11
                                  V.
               MIS. SUNDSTRAND FORMS P. LTD.
                 (Civil Appeal No. 4077 of 2003)
                         AUGUST 30, 2011
8
    [DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE, JJ.]

        Central Excise Tariff Act, 1985:

c      Schedule - Heading 48. 16 read with sub-heading
  4816.00; and Heading 48.20 - Carbonless stationery -
  Classification of - Assessee manufacturing computer
  stationery by processing carbonless paper -Excise duty
  demanded on carbonless paper - Held: Carbonless paper or
D self-copying paper emerges at the intermediate stage, it is an
  intermediary product and is a well known marketable
  commodity - It is being bought and sold and there is a
  demand of such articles in the market - The Commissioner
  has rightly recorded the findings that the intermediary products
  in the instant case would fall and are classifiable under
E Heading 48. 16 and duty payable for the said intermediary
  products is prescribed as 20% - Rules of Interpretation of the
  Schedule - r. 2(a) and 3 - Central Excise Rules, 1944 - r.
  9(2) - Central Excise Act, 1944 - s. 11-A - Interpretation of
  Statutes - Principle of ejusdem generis.
F
       The respondent-assessee engaged in the
  manufacture of computer stationery, business forms etc.
  (carbonless or with carbon) claimed that the said goods
  produced by it fell under Sub-Heading Nos. 4901.90 and
G 4820.00 of the Schedule to the Central Excise Tariff Act,
  1985 and, therefore, chargeable to nil rate of duty. A team
  of Central Excise Officers visited the factory premises of
  the assessee and examined the manufacturing process
  of the carbonless stationery. It was found that the
H                                764
  COMMNR. OF CENTRAL EXCISE, MEERUT-11 v. SUNDSTRAND   765
                   FORMS P. LTD.

assessee was purchasing carbonless paper in roll form,        A
coated with chemical on backside or front side or on both
sides, from the market and such carbonless paper was
subjected to the process of only printing and perforation
etc. for the manufacture of the stationery. Show cause
notices were issued to the assessee raising demand of         B
duty in terms of Rule 9(2) of the Central Excise Rules,
1944 read with s. 11A of the Central Excise Act, 1944,
stating that the assessee was engaged in evasion of duty
on carbonless paper which emerged at the intermediate
stage during the course of manufacture of carbonless          c
stationery from the plain paper. The Department
classified the product as "the coated paper" at the
intermediate stage under Heading 48.16. Simultaneously,
proceedings were initiated against the MD and the Deputy
MD of the assessee for imposing the penalty. The              0
Commissioner confirmed the demand and imposed a
penalty of Rs. 50 lakhs on the assessee. The appeal of
the assessee having been allowed by the Customs,
Excise and Gold (Control) Appellate Tribunal, the revenue
filed the appeal.
                                                              E
    Allowing the appeal, the Court

      HELD: 1.1 There is no dispute with regard to the fact
that the carbonless paper or self-copying paper emerges
at the intermediate stage and has its own life but the        F
same could be further used in the manufacture of
stationery in continuous process. There is also no
dispute with regard to the fact that the carbonless paper
is a well known marketable commodity as is evident from
the process of manufacturing. The carbonless paper or         G
other paper cannot be treated as the computer stationery
unless it is subjected to the second stage of processing,
i.e., the process of perforation, punching and fan-folding
etc. Therefore, in common trade parlance the computer
stationery is processed through various modes of              H
processing. [Para 6) [770-E-G]
     766    SUPREME COURT REPORTS            [2011] 10 S.C.R.


A       1.2 The opinion of the Institute of Paper Technology,
   Saharanpur, U.P clearly indicates that computer
   stationery is different from carbonless paper and self-
   copyi ng paper. It was also indicated therein that
   carbonless papers or self-copying papers are fully coated
 B throughout and are available in reel/sheet form. [Para 20-
   21] (775-A-C]
          1.3 Para 2(a) of the Interpretative Rules for -
     interpreting headings of the Schedule to the Central
     Excise Tariff Act provides that any reference in a heading
· C to the goods shall be taken to include a reference to
     those goods incomplete or unfinished, provided that, the
     incomplete or unfinished goods have the essential
     character of the complete or finished goods. Para 3
     thereof provides that when goods are classifiable under
  D two or more headings, classification should be effected
     by relying on the heading which provides the tnost
     specific description and the same would be preferred to
     headings providing a more general description. [Para 22] ~·
   . [776..C-E]
 E
       1.4 The appropriate specific heading for the
  intermediary product would be Heading 48.16. The
  Commissioner, who has passed the order-in-original, has
  held that the carbonless paper/self-copying paper, which
F is an -intermediary product, is classifiable under Headings
  48.09 and 48.16 depending upon the size of the papers
  manufactured by the respondent-company; whereas the
  end product, i.e., the computer stationery, is classifiable
  under Heading 48.20 which attracts Nil rate of duty, the
G intermediary product is to be classified under Heading
  48.16 and the duty payable for such intermediary goods
  is prescribed as 20%. He has given cogent reasons as
  to why the carbonless paper emerging at intermediate
  stage would be classifiable under heading 48.16.
H According to him goods covered under Headings 48.09
   COMMNR OF CENTRAL EXCISE, MEERUT-11 v. SUNDSTRAND    767
                   FORMS P. LTD.

 and 48.16 are of same kind except that in latter be~ding A    '
 the goods, other than in roll form or in rectangular siieet
 with at least one side exceeding 36 cm fall and that
 applying the principle of ejusdem generis, the carbontess
 paper whether printed or not, which is not in roll form or
 in the sheet form with one side exceeding 36 cm, would B
 be covered under sub-heading No. 4816.00. [Para 24-26]
 [776-A-H; 777-A] '

        1.5 So far as intermediary product is concerned, the
   Commissioner also considered the scope of marketability         C
 . of the intermediary product in question. Relying on the
   statements made by the Director of the respondent-
   company itself and other relevant documents on record,
   the Commissioner came to a finding that the carbonless
   paper even in printed form could be sold or purchased
   although the number of the customers is restricted. He          D ·
  also found on appreciation of the documents on record
· that carbonless paper invariably emerges during the
   course of manufacture of computer stationery and such
   carbonless paper emerging at the intermediary stage is
   known to the market, has a distinct and very well-              E
   identified market and is capable of being marketed. [Para
 27] [777 -B-0]

      1.6 It has been indicated from the findings of the
 Commissioner that the respondent company not only F
 manufactures the end product but it also manufactures
 the intermediary products which are sold by them even
 in the roll form in the market. Invoices indicating sale by
 the respondent have also been placed on record and
 from scrutiny of the same it appears that such G
 intermediary products were sold in roll forms only. It is
 also an undisputed fact in the instant case that the
 respondents themselves purchased intermediary
 products from the open market. [Para 28] [777-E;..F]

    . 1.7 The record and the description of the goods in           H
    768    SUPREME COURT REPORTS.            [2011] 10 S.C.R.

A the headings and the rules of interpretation of the
  Schedule to the Central ·Excise Tariff Act, make it clear
  that although the respondent company may be registered
  for newspapers, etc., but it cannot be said that either the
  end product or the intermediary product would fall under
B Chapter 49, heading 49.01. A reading of Heading 48.16
  with sub heading 4816.00, makes evident that it includes
  within its extent carbon paper, self-copying paper and
  other copying or transfer papers but other than those
  articles included in heading 48.09 which is specifically
c relatable to a particular size of paper and, therefore, the
  Commissioner has rightly recorded the finding$ that the
  intermediary products in the instant case would fall and
  are classifiable under heading 48.16. [Paras 31-32) [778-
  C-F]
D      1.8 In the instant case, there is enough evidence
  available on record to show that intermediary product in
  question is generally being bought and sold and there is
  a demand of such articles in the market as the
  respondents themselves have purchased it from the
E open market for manufacturing the end product. [Paras
  35 and 38) [779-B-C; 780-8-C]
       1.9 In terms of findings arrived at and on appreciation
  of the materials on record, this Court is of the view that
F the findings arrived at by the Tribunal by upsetting the
  findings of the Commissioner were unjustified and
  uncalled for. The judgment and order passed by the
  Tribunal is, therefore, set aside and the order dated
  28.12.2000 passed by the Commissioner Central Excise
G restored. [Para 39] [780-D-E]
        Medley Pharmaceuticals Ltd. Vs. The Commissioner of
    Central Excise and Customs, Daman (2011) 2 SCC 601:
    2011 (1) SCR 741 - relied on.

H
  COMMNR. OF CENTRAL EXCISE, MEERUT-11 v. SUNDSTRAND          769
                   FORMS P. LTD.

                      Case Law Reference:                             A
     2011 (1) SCR 741              Relied on             Para 37
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4077 of 2003.
                                                                      B
    From the Judgment & Order dated 14.05.2002 of the
Customs, Excise and Gold (Control) Tribunal, New Delhi in
Appeal No. E/753/01-C.

     P.P. Malhotra, ASG, Rachna Joshi lssar, Sonia Malhotra,
Dr. Monika Gosain, B.K. Prasad, Anil Katiyar for the Appellant.       C

     A. K. Jain, Rajesh Jain, Rajesh Kumar for the Respondent.
     The Judgment of the Court was delivered by

      DR. MUKUNDAKAM SHARMA, J. 1. The present appeal                 D
arises out of the judgment and order dated 14.5.2002 of                   ,...
Customs, Excise and Gold [Control) Appellate Tribunal, New
Delhi [for short "the Tribunal"] allowing the appeal filed by the
Respondent-assessee and setting aside the order dated
28.12.2000 of the Commissioner, Central Excise, Meerut-11,            E
U.P ..

     2. In order to decide the issues arising in the present case
in proper perspective, basic facts leading to filing of the present
appeal are being recapitulated hereunder.                             F

      3. Respondent is a firm engaged in the manufacture of
computer stationery, business forms, etc., [carbonless or with
carbon]. The respondent claims that the goods produced by
them, namely, computer stationery, business forms and other           G
allied products fall under sub-Heading Nos. 4901.90 and
4820.00 of the Schedule to the Central Excise Tariff Act, 1985
[for short "the Tariff Act"] and, therefore, the said articles are
chargeable to NIL rate of duty.

     4. Multi copies of computer stationery are manufactured          H
    770     SUPREME COURT REPORTS                 [2011) 10 S.C.R


A   either by inserting carbon paper between .the two sh"eets of
    paper or by chemical treatment of the paper to4l1ake itself
    copying [carbonless stationery].
                                                       .-
        5. The carbonless paper is a chemically treated paper
  used for producing impression of the writing or manuscript of
B
  the original paper on the-other paper sheet. Such carbonless
  paper, which is a kind of copying paper is processed firstly by
  printing, which is done at pre-fixed places of the paper with the
  purpose of printing names of the buyers, logo or some other
  words as desired by the buyers and after the said process is
c over the printing paper is then passed through coating unit for
  applying chemical to develop the character of self-copying
  paper. The backside of the paper is coated to obtain top copy
  and front coating is done on the sheet which is to be used as
  bottom copy. The 11ext step, which is the final step, is to get
D chemically coated copy passed through the coating unit for
  perforation, punching and fan-folding ..
                                                                       I
      . 6. There is also no dispute with r~gard to the fact that the
  carbonless paper or self-copy paper emerges at the
E intermediate stage and has its own life but the same could be
  further used in the manufacture of stationery in continuous
  process. There is also no dispute with regard to the fact that
  the carbonless paper is a well known marketable commodity
  as is evident from the process of manufacturing. The carbonless
F paper or other paper cannot be treated as the computer
  stationery unless it is subjected to the s~cond stage of
  processing, i.e., the process of perforation, punching and fan-
  folding etc. Therefore, in common trade parlance the computer
  stationery is processed through various modes of processing
  as indicated hereinbefore.
G
       7. On intelligence, a team of Central Excise Officers visited
  the factory premises of the respondent herein at Naida and
  examined the manufacturing process of the carbonless
  stationery. It was found that the respondent-company was
H purchasing carbonless paper in roll form, coated with chemical
                                                          '   '   '
                        •      •   ;-".   '   •   •   .               •   !
   CQMMNR. OF CENTRAL_EXCISE, MEERlJT-11 v. SUNDSTRAND                        . 771
      ·FQRMS P. LTQ. [DR MUKUNDAKAM SHARMA, J;] · ,

 on backside or front side or on· both sides, from the market and                     A
 such carbonless paper was subjected to the process of only
 printing and perforation, etc., for the manufacture of the
 stationery.

       8. The Commissioner, Central Excise, Meerut-11 issued a . 8
  show cause notice dated 30.04.1998 wherein it was alleged
  that the respondents were engaged in evasion of duty on
  carbonless paper which emerged at the intermediate stage
  during the course of manufacture of carbonless stationery from
  the plain paper. Therefore, they were asked to show cause as
  to why duty amounting to Rs. 49,05,335.00 which was allegedly C
  not paid on the carbonless paper manufactured and removed
  from their factory during the period from 1993-94 to 1997-98
  (upto 12/97} should not be recovered from them under Rule 9(2)
  of the Central Excise Rules, 1944 read With provisions of
. Section 11 A(1) of the Central Excise Act, 1944 invoking D
  extended period of 5 years and also to show cause as to why
  penalty and interest on the evaded duty should not be imposed
  upon it. The said notice proposed to charge duty on the said
  carbonless paper emerging at the intermediate stage under
  sub-tieading No. 4816.00 to the Scl'ledule to the Central Excise E
  Tariff Act, 1985.

       9. Simultaneously, proceedings were initiated agains~ MD
  and Deputy MD of the respondent-company for imposing
···penalty upon them. Thereafter, six otl'ler show cause notices                      F
  were also issued on the same issue to the respondents for
  raising the demand of duty in terms of Rule 9(2) of the Central
  Excise Rules, 1944 read with Section 11A of the Central Excise
  Act, 1944 and invoking penal provisions.

      10. Notice issued by the Department mentioned that the                          G
 respondent-company is. engaged in evasion of duty on
 carbonless paper which emerged at the intermediate stage
 during the course of manufacture of carbon less stationery from
 the plain paper. Therefore, the Department demanded Central
 Excise duty at the intermediate stage when the paper is coated                       H
    772     SUPREME COURT REPORTS                 [2011] 10 S.C.R.

A to make it carbon less paper or self-copying paper. Notice
  alleged that the carbonless paper is a separate commodity,
  different from plain paper, and its user is also different from the
  ordinary paper. The carbonless paper emerged on subjecting
  certain process, i.e., application of chemicals and printing
B which was done to describe the name of the buyer and other
  details relatinQ to which ultimately the paper was to be used
  for in the present case. The printing was only incidental to the
  carbonless paper emerging at the intermediate stage and that
  the printing was not in any way necessary for the manufacturing
c of carbonless paper which emerged at intermediate stage.
  According to the Department, such carbonless papers could
  be further used into the manufacturing of the stationery in
  continuous process, as it was evident from the process of
  manufacture and statement of the party that the process of
D perforation, punching and fan folding, etc., was responsible to
  convert carbonless paper/other paper into computer stationery.

        11. The Department classified the product as "the coated
  paper" at the intermediate stage under Heading 48.16 of the
  Tariff Act which applies to carbon paper, self-copying paper and
E other copying or transfer papers. Notice alleged that the printing
  of certain words only specified the buyer but it would not in any
  way make them unmarketable, as the carbonless paper which
  emerged at the intermediate stage in the course of the
  manufacture of the carbonless stationery was similar to
F carbonless paper purchased from the market and the only
  difference was that in the case of the respondent the carbon less
  paper manufactured at their end was printed with some words
  relating to the buyers.

G       12. Thereafter, the Commissioner in its Order-In-Original
    dated 28.12.2000 confirmed the demand of the department
    and imposed penalty of Rs. 50 lakhs on the respondent-
    assessee.

      13. Aggrieved by the same the respondent-assessee filed
H an appeal before the Customs, Excise and Gold [Control]
   COMMNR. OF CENTRAL EXCISE, MEERUT-11 v. SUNDSTRAND          773
      FORMS P. LTD. [DR. MUKUNDAKAM SHARMA, J.]

Appellate Tribunal, New Delhi which vide its order dated              A
14.05.2002 held that the impugned product is not classifiable
under' heading 48.16 as carbonless paper and allowed the
appeal of the respondent.

     14. Being aggrieved by the said order of the Tribunal, the       B
Department has filed the present appeal, on which we heard
learned counsel appearing for the parties, who have taken us
through all the materials available in the record.

      15. There are two specific issues which arise for our
consideration in the present appeal and the same were also            C
argued extensively by the counsel appearing for the parties. The
first issue, relates to under which particular heading the
intermediary product would fall or is it to be treated as a final
or end product, under heading 4820.00 ofthe Schedule to the
Central Excise Tariff Act. The second issue arising for our           D
consideration is as to whether or not the intermediary product
in question has a marketability prospect and capability.

     16. The counsel appearing for the appellant argued that
the intermediary product with which we are concerned. falls           E
under Heading No. 48.09 read with 48.16 of the Schedule to
the Central Excise Tariff Act whereas according to the counsel
appearing for the respondent-company the same falls under the
Heading 48.20 or under sub heading 4901.90 of the Schedule.

     17. In support of his contention, counsel appearing for the      F
respondent-assessee relied upon the Circular dated
15.10.1991 issued by the Central Board of Excise and
Customs, Government of India, New Delhi, which was issued
in relation to classification of paper printed with a format of air
line tickets or embarkation/disembarkation cards and                  G
submitted that they were under a bona fide belief in view of the
said circular that no duty was attracted on the printed coated
paper arising at the inter mediate stage during the continuous
process of manufacture of carbonless computer stationery and
that in the said circular it was clarified that formats (of airline   H
    774       SUPREME COURT REPORTS               [2011] 10 S.C.R.


A tickets, embarkation cards, etc.) which have ink deposited at
  appropriate places on the reve~se side, instead of being
  classified under Heading 48.09 or 48.16, would be classifiable
  under sub-Heading 4820.00 or 4901.90 attracting nil rate of
  duty and that the Department is bound by its own Circular
B issued by the Board.

       18. On the other hand, counsel appearing for the appellant
  vehemently argued that the said Circular has no application to
  the facts of the present case as the Circular neither deals with
C continuous sarbonless computer stationery paper nor with the
  carbonless stationery and that it actually deals with plain
  continuous computer stationery.

       19. It is the case of the appellant that the product
  manufactured by the respondent company is carbonless paper/
D self-copying paper, which is coated and therefore the same
  should fall under Heading 48.09 for which excise duty at the rate
  of 20% is payable. However, heading 48.09 prescribes a
  particular size of paper in rolls of a width exceeding 36 cm or
  in rectangular (including square) sheets with at least one side
E exceeding 36 cm in unfolded state. Consequently, the said
  heading would not be applicable exactly to the product of the
  respondent in the present case. However, what is applicable
  is Heading 48.16, which reads as follows:

          "48.16 4816.00 Carbon paper, self-copy paper and
F         other copying or transfer papers (other than those of
          heading No. 48.09), duplicator stencils and offset plates,
          of paper, whether or not put in boxes.

                                                Rate of Duty 20%"
G
       20. The respondent, however, submitted that they
  manufacture Registers, account books, note books and other
  allied products for which Nil duty is prescribed under Heading
  49.01 of the Schedule, where the description of goods is
H printed books, newspapers, pictures and other products of the
   COMMNR. OF CENTRAL EXCISE, MEERUT-11 v. SUNDSTRAND       - 775
      FORMS P. LTD. [DR. MUKUNDAKAM SHARMA, J.]

printing industry; manuscripts, typescripts and plans. According     A
to the counsel appearing for the respondent the products
manufactured by them should be treated falling under Heading
No. 49.01. Reference was also drawn to the opinion of the
Institute of Paper Technology, Saharanpur, U.P.
                                                                     B
     21. The said opinion clearly indicates that computer
stationery is different from carbonless paper and self copying
paper. It was also indicated therein that carbonless papers or
self copying papers are fully coated throughout and are
available in reel/sheet form.                         ·
                                                                     c
      22. There is a set of Interpretative Rules for interpreting
headings of the Schedule to the Central Excise Tariff Act. Para
2A of the same provides that any reference in a heading to the ·
goods shall be taken to include a reference to those goods
incomplete or unfinished, provided that, the incomplete or D
unfinished goods have the essential character of the complete
or finished goods. Para 3 thereof provides that when goods are
classifiable under two or more headings, classification should
be effected by relying on the heading which provides the most
specific description and the same would be preferred to E
headings providing a more general description.

      23. In the tariff provided under Chapter 48, there are
 certain notes which are relevant for the purpose of interpreting
 the subject matter of various headings. Note 7 thereof, provides,   F
 that paper, paperboard, cellulose wadding and webs of
cellulose fibres answering to a description in two or more of
the heading nos. 48.01 to 48.11 are to be classified under one
of such headings which occurs last in the numerical order in
the Schedule. Note 11 thereof also provides that except for the
goods of Heading No. 48.14 or 48.21, paper, paperboard,              G
cellulose wadding and articles thereof, printed with motifs,
characters or pictorial representations, which are not merely
incidental to the primary use of the goods, fall in Chapter 49.

    24. Strong reliance was placed by the counsel appearing          H




             11-·   .   J   ~
    776     SUPREME COURT REPORTS                 [2011) 10 S.C.R.


A for the respondent on the Circular dated 15th October, 1991,
  issued by the Central Board of Excise and Customs,
  Government of India, New Delhi. The said circular relates to levy
  of duty on paper sheets printed with format of airline tickets or
  embarkation/disembarkation cards and classification thereof.
9 The said circular clarifies and relates to airline tickets. A bare
  glance on the aforesaid circular makes it crystal clear that the
  intermediary products referred to in the present appeal are not
  directly relatable to airlines tickets or embarkation/
  disembarkation cards. Besides, the aforesaid circular deals
c with the end product; namely, the computer stationery which is
  classifiable under Heading 48.20. If the end product is
  classifiable under Heading 48.20 then it would be difficult to say
  that the intermediary product would ·also fall under heading
  48.20. In our view, the appropriate specific heading for the
  intermediary product would be Heading 48.16.
0
        25. The Commissioner of Customs, who has passed the
  Order-In-Original was conscious of the aforesaid fact.
  According to him, the carbonless paper/self copying paper,
  which is an intermediary product is classifiable under Headings
E 48.09 and 48.16 depending upon the size of the papers
  manufactured by the respondent company whereas the end
  product i.e. the computer stationery is classifiable under
  Heading 48.20, which attracts NIL rate of duty. According to him
  although the final product is not dutiable, as the same is
F classifiable under Heading 48.20, where NIL rate of duty is
  prescribed, but so far as intermediary product is concerned it
  is to be classifiable under Heading 48.16 and the duty payable
  for such intermediary goods is prescribed as 20%.

       26. The Commissioner has given cogent reasons as to
G why the carbonless paper emerging at intermediate stage
  would be classifiable under heading 48.16. According to him
  goods covered under Headings 48.09 and 48.16 are of same
  kind except that in latter heading the goods, other than in roll
  form or in rectangular sheet with at least one side exceeding
H
  COMMNR. OF CENTRAL EXCISE, MEERUT-11 v. SUNDSTRAND         777
     FORMS P. LTD. [DR. MUKUNDAKAM SHARMA, J.]

36 cm fall and that applying the principle of ejusdem generis,       A
the carbonless paper whether printed or not which is not in roll
form or in the sheet form with one side exceeding 36 cm would
be covered under sub heading No. 4816.00.

     27. Having decided the aforesaid classification in the          8
aforesaid manner, so far, intermediary product is concerned the
Commissioner also considered the scope of marketability of
the intermediary product in question. Relying on the statements
made by the Director of the respondent-company themselves
and other relevant documents on record the Commissioner              C
came to a finding that the carbonless paper even in printed
form could be sold or purchased although the number of the
customers is restricted. He also found on appreciation of the
documents on record that carbonless paper invariably emerges
during the course of manufacture of computer stationery and
such carbonless paper emerging at the intermediary stage is          D
known to the market, has a distinct and very well-identified
market and is capable of being marketed.

     28. It has been indicated from the findings of the
Commissioner that the respondent company not only                    E
manufactures the end product but it also manufactures the
intermediary products which are sold by them even in the roll
form in the market. Invoices indicating sale by the respondent
have also been placed on record and from scrutiny of the same
it appears that such intermediary products were sold in roll         F
forms only. It is also an undisputed fact in the present case that
the respondent themselve~ purchased intermediary products
from the open market. But then only difference even according
to them also is that such carbonless paper with coating
purchased from the market is of inferior quality.
                                                                     G
     29. The Tribunal, however, while dealing with the appeal
filed before it upset the aforesaid findings holding that
respondent- assessee was engaged in the manufacture of
printed computer stationery and not self copying paper, and
                                                                     H
    778      SUPREME COURT REPORTS                   [2011] 10 S.C.R.


A therefore, the intermediary products of the respondent cannot
  be classified under Heading 48.16.

         30. The Tribunal also relied upon the Circular dated
    15.10.1991 issued by the Central Board of Excise and
    Customs for coming to a finding that provided tickets, printed
8
    circulars, letters, forms etc. which are essentially printed matters
    requiring filing up of only minor details would be covered by sub
    heading 4901.90.

       31. Having examined the record and the description of the
C goods in the headings and upon noticing rules of interpretation
  of the Schedule to the Central Excise Tariff Act, we are of the
  considered opinion that although the respondent company may
  be registered for newspapers, etc., but it cannot be said that
  either the end product or the intermediary product would fall
D under Chapter 49, heading 49.01. End product here is
  admittedly computer stationery which would specifically fall
  under Chapter 48, heading 48.20, sub heading 4820.00.

       32. When we read heading 48.16 with sub heading
E 4816.00, we find that it includes within its extent carbon paper,
  self-copy paper and other copying or transfer papers but other
  than those articles included in heading 48.09 which is
  specifically relatable to a particular size of paper and therefore
  we are in agreement with the findings recorded by the
F Commissioner that the intermediary products in the present
  case would fall and are classifiable under heading 48.16.

        33. The next issue that is required to be decided is as to
    whether the intermediary products are marketable or not.

G        34. Evidence in the nature of documents and statements
    recorded in that regard indicates that such intermediary products
    are available in the market and are brought and sold in the open
    market. The Commissioner has referred to such evidence on
    record and even the invoices of the respondents themselves
H
   COMMNR. OF CENTRAL EXCISE, MEERUT-11 v. SUNDSTRAND            779
      FORMS P. LTD. [DR. MUKUNDAKAM SHARMA J.]

 clearly indicate that they have sold intermediary products of the       A
 nature in question in the open market in roll forms.

      35. In the present case, there is enough evidence available
 on record to show that not only the intermediary products in the
 present case are capable of being bought and sold in the
                                                                         B
 market but they are in fact sold and purchased in the open
 market. Even the respondents have admitted that they have
 themselves purchased such intermediary products from the
 market although the products available in the market were of
 inferior quality. But the fact remains that there are enough
 people like the respondents willing to purchase such material           C
 from the market.

      36. During the course of arguments reference was made
 to a number of decisions of this Court on the issue relating to
 marketability of a product.                                             D

       37. We have a recent decision of this Court in the case of
  Medley Pharmaceuticals Ltd. Vs. The Commissioner of
  Central Excise and Customs, Daman, reported ,in (2011) 2
  sec· 601. This Court in the said decision has very carefully           E
  consideced almost all the previous decisions of this Court on
  the issue of the levy/payment of Excise Duty Valuation on
  articles manufactured by the assessee company therein. After
  referring to practically all the decisions on the issue this Court
  in the aforesaid case held that the consistent view of this Court
  is that the marketability is an essential criteria for charging duty   F
  and that the test of marketability ·is that the product which is
  made liable to duty must be marketable in the condition in which
  it emerges. This Court also held that the word ·Marketable'
  means saleable or suitable for sale and that it need not in fact
  be marketed but then the article should be capable of being            G·
  sold to consumers, as it is without anything more. This Court
  further went on to hold that the essence of marketability of
  goods is neither in the form nor in the shape or condition in
· which the manufactured article is found but it is the commercial
  identity of the article known to the market for being bought and       H
    780       SUPREME COURT REPORTS                [2011] 10 S.C.R.

A   sold. The Court further held that the product in question is
    generally not being bought or sold or has no demand in the
    market, would be irrelevant. The aforesaid conclusions are
    arrived at after considering almost all the previous decisions
    of this Court on the issue.
8
       38. When we apply the ratio of the aforesaid decision of
  this Court in the case of Medley Pharmaceuticals Ltd. {supra)
  to the facts of the present case it becomes crystal clear that
  the intermediary prOduct in question is generally being bought
  and sold and there is a demand of such articles in the market
C as the respondents themselves have purchased it from the
  open market for manufacturing the end product.

           39. In terms of findings arrived at and on appreciation of
  the materials on record, we are of the view that the findings
D arrived at by the Tribunal by upsetting the findings of the
  Commissioner vide its order dated 14.05.2002 were unjustified
  and uncalled for. The Judgment and Order passed by the
  Tribunal is therefore set aside and we restore the order dated
  28.12.2000 passed by the Commissioner Central Excise,
E Meerut-11, U.P.

         40. Accordingly, the appeal is allowed but leaving the
    parties to bear their own costs.

    R.P.                                           Appeal allowed.'