Holding

A product must be wholly of paper or paper‑board to be covered by Item No. 17(4); composite drums with plywood and steel fall under Item No. 68.

Summary

M/s. Warden and Co. (India) Pvt. Ltd. manufactures fibre drums whose cylindrical side is paper, while the lids and bottom are plywood reinforced with steel rings. The company sought to have the drums classified under Central Excise Tariff Item No. 17(4) and to claim exemption under Notification No. 66/1982. The Assistant Collector initially approved the classification but later required re‑classification under the residuary Item No. 68, leading to a series of appeals. The Supreme Court held that to fall within Item 17(4) a product must be wholly made of paper or paper‑board; because the drums contain substantial plywood and steel components, they cannot be treated as articles of paper. Relying on earlier decisions that an article must be made entirely of the material named in the tariff, the Court dismissed the appeal and upheld the Tribunal’s order that the drums be classified under Item No. 68.

Issues considered

Whether a fibre drum that is partly paper and partly plywood/steel qualifies as an article of paper or paper‑board under Central Excise Tariff Item No. 17(4).
Whether the drum should be classified under the residuary Item No. 68 instead of Item No. 17(4).

Legislation cited

Central Excise and Salt Act, 1944s. 35L

Subjects

central excisetariff classificationItem 17(4)Item 68composite goodspaper packagingnotification 66/1982interpretation of tariff

Judgment

A M/S. WARDEN AND CO., (INDIA) PVT. Liu.
v
COLLECTOR OF CENTRAL EXCISE, THANE
-
FEBRUARY 1, 1995

B [AM. AHMADI, CJI, AND N.P. SINGH, JJ.]

Central Excises and Salt Act, 1944-Central Excise Tariff-Item No.
17(4) and residumy Item No. 68-Fibre D1Um-Cylindrica/ portion of d1Um
made of pape1~Bottom and top of plywood reinforced with steel ring and
C clamp-Paper constituting SJ.18% of finished product-48.82% of plywood,
rings and clamps-Whether fibre d1Um is covered by Item No. 17(4}-Held,
No-It shall be covered by Item No. 68.

The appellant, manufacturing fibre drum which consisted of circular
tube made out of paper or paper-board and the lid and the bottom made
D of plywood, reinforced with mild steel rings and clamps, sought classifica·
tion of the said drum under Item No.17(4) and exemption under notifica·
tion No. 66 of 1982. The Assistant Collector of Central Excise, approved
the classification sought. However, by a subsequent order, the appellant
was called upon to file a revised classification list classifying fibre drum
E under item 68, on the ground that the fibre drum was not made exclusively
out of paper, it was not eligible for classification under Item No. 17(4):

The appellant filed revised classification while representing his case
that fibre drum was classifiable under Item No. 17(4) and not under Item
• No. 68. However, the Assistant Collector held that Item No.17(4) was only
F applicable to such goods and articles which were made exclusively out of
paper or paper board. Appeal filed against this order was allowed on the
finding that fibre drum was classifiable under item No.17(4). However, on
appeal preferred by the Revenue, the Tribunal held that the fibre drum
was classifiable under Item No. 68 of the Central Excise Tariff and not
G under Item No. 17(4). Hence this appeal.
The appellant urged that internationally, composite paper board
drums and containers even when fitted with reinforcing circular bands of
other materials, other than they were classified under heading 48.16 under
Customs co-operation Nomenclature which was equivalent to Tariff Item
H No.17(4).
738
WARDEN AND CO. (I) PVf. LTD. v. COLLECTOROFCENTRALEXCISE(N.P.SINGH,J.]739

Dismissing the appeal, this Court A
HELD: To be included in the tariff Item No. 17, the product must
be of paper, paper board and all sorts. The fibre drum manufactured by
appellanf'was a container made of the paper content constituting 51.18%
of the finished product, the plywood content of about 23.57% and rings and B.
clamps of about 19.1/2%. It could not be held to be article of paper or paper
board, in view of the top and bottom of such drum having been made of
plywood reinforced with mild steel ring and clamp. Hence such a fibre
drum shall not be covered by Item No.17(4) and it shall be covered by
residuary Item No. 68.
c
M/s. Indian Textile Paper Tube Company Ltd. Madras v. Collector of
Central Excise, Madurai, (1984) 18 ELT 35, relied on.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5401 of
1985.
D
From the Judgment and Order dated 19.8.85 of the Central Excises
& Salt Act, 1944 of the Customs, Excise & Gold (Control) Appellate
Tribunal, New Delhi in Appeal No. E/883/85-C Order No. 577 of 1985-C.

AN. Haksar, U.A. Rana, Rajiv Tyagi, Anand Prasad for Gagrat & E
Co.

Dr. R.R. Misra, W. A. Qadri and V.K. Verma for the Respondent.

. The Judgment of the Court was delivered by
F
N.P. SINGH, J. This-is an appeal under Section 35L of the Central
Excise and Salt Act, 1944 (hereinafter referred to as 'the Act').

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 plywood which is reinforced with mild steel rings G
and c).amps. According to the appellant, in the total weight of the .I7bre
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 t~e paper or paper board. Commercially, it is known as a
paper product. H
740 SUPREME COURT REPORTS · [1995] 1 S.C.R.

A The dispute is as to whet~er 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 Notification No. 66 of
B 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
Notification 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 :

c "Sub-item (4) covers packing transport, storage, or sale of
merchandise whether or not having a decorative valnc; bags canes,
packets, sacks, boxes, cartons, drums fitted with reinforcing cir-
cular bands of other materials, tubular containers for posting
documents, garment bags, the like are also covered under this -
sub item".
D
The Assistant Collector of Central Excise, however, by an 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
E under Item No. 17(4). In view of the Jetter 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 repre-
senting 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
p 20.10.1982, the Assistant Collector of Central Excise, held that Item No.
17(4) and Notification No. 66/82 were only applicabie to such goods and
..
articles which were made exclusively out of paper or paper board. Ag-
grieved 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 classlfiable-under Item No. 17(4). The Collector of Central
G Excise (Appeals) referred to the composition of the fibre drum and the
-aforesaid Trade Notice in s1upport of his finding.

The Revenue preferred an appeal before the Customs, Excise &
Gold (Control) Appellate Tribunal (hereinafter referred to as 'the
H Tribunal'). The Tribunal came to tlie conclusion that the fibre drum
,._·.

WARDEN AND CO. (I) l'Vf. LTD. v. COLLECIDROFCEN'I'RALEXCISE[N.l'. SINGH,J.)741
I

manufa~tured by the appellant was classifiable under Item, No. 68 of the A
Central Excise Tariff and not under Item No. 17(4). On that finding the
order of the Collector of Central Ex.cise (Appeals) was set aside.

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. B
17(4), when apart from paper or paper board, the lid and the bottom of
the said fibre drum are made of plywood 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 C
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) .............:...................................
D
(2) ................................................ .

(3) ............................................... ..
( 4) Boxes, cartons, bags and othei; packing TWENTY
cbntainers (including flattened or folded TWO ANDA
boxes and flattened or folded cartons, HALF PER- E
whether or not printed and whether in CENT AD
. assembled or unassembled condition." VALOREM
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, pape~ board and all sorts including paste board, mill
board, corriigated board and articles thereof have been specified in clauses
p

1 to 4 of Item No. 17. It need not be pointed qut that boxes, cartons, bags
and-other packing containers, mentioned in Itein No. 17(4) must have been
manufactured out of paper or paper board. But if just to strengthen the
packing container,1 a small piece of plywood or a steel ring is introduced,
whether such packmg containers shall be out of the purview of Item No. G
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 plywood, reinforced with mild steel ring and clamp.
The Tribunal has also mentioned in the impugned order that according to
the appella'nt, in tenn:s of the percentage content, paper constitutes 51.18% H
SUPREMECOURTREPORTS . [1995] 1 S.C.R.

A 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 ~aid that fibre drum which is a container is made of "paper and paper
B boaro, all 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 along with 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
C or paper board constitutes only 51.18% and the rest 48.82% consists of
plywood content, rings and clamps etc.?

On behalf of the appellant, it was pointed out that internationally,
composite paper board drums and containers e'len when they are fitted
with reinforcing circular bands of other materials, other than paper, e.g.
D textile backings, wooden supports, string handles, metal or plastic corners,
they are classified under heading 48.16 under Customs Co-operation
1
Nomenclature (CCCN - Brussels which is equivalent to Tariff Item No.
17(4).

E The Glossary of Terms relating to Paper and Flexible Packaging
issued by Indian Standards Institution (IS : 7186 - 1973) defines
'Fibreboard Drum' as "a shipping package with cylindrical side wall com-
posed of paper or board having disc ends of similar or different materials,

F
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 packing 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 the products covered by said Item ..
No. 17 must be the product of paper, paper board and all sorts.
G
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:

H "Articles made of Plastics, all sorts, including tubes, rods,
\
WARDEN AND CO. (l)PVf. LTD.v. COLLECTOROFCENTRALEXCISE(N.P. SINGH,J.)743

sheets, foils sticks, other rectangular or profile shape whether A
laminated or not, and whether rigid or flexible including lay flat
tubings and polyvinyl chlorides sheets ...... "

In that connection, it was said:

"The learned Counsel contended that the Plastic torch B
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 none-the-less retains the character of a
plastic tube. A mere reference to Tariff Item No. 15A (2) would
show that the articles therein described are plastic materials in
different shape and form and not articles made from such plastic
c
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 D
•> a plastic tube is used for manufacturing plastic torch. Article 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
E
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)

The Tribunal has placed reliance on the judgment in the case of Mis.
Indian Textile Paper Tube Company Ltd. Madras v. Collector of Central
F

Excise, Madurai, (1984), 18 E.L.T. 35, where it was said that Vim Con-
tainers and Defence Containers cannot be said to be articlt'.s of paper or
paper board; they are composite containers made of paper, paper board
and other metal components. The material components like lids and bot- G
-I toms were made of tin plates and black plates and printed aluminum 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), before 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 Con- H
744 SUPREME COURT REPORTS [1995j 1 S.C.R.

A tainers having_ been made of tin plates and black plates with printed
aluminum 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 tontainer and Defence Container. The Tribunal has
rightly come to the conclusion that such fibre drums shall not be covered
B by Item No. 17(4) and they shall be covered by residuary Item No. 68.
Accordingly, the appeal is dismissed. The order of the Tribunal is
upheld. There will be no order as to costs.

A.G. Appeal dismissed;

)

....