1994(12)LCX0056

IN THE CEGAT, SPECIAL BENCH `C’, NEW DELHI

S/Shri S.K. Bhatnagar, Vice-President and S.L. Peeran, Member (J)

N.T.V. MULTIWALL PAPER BAGS (P) LTD.

Versus

COLLECTOR OF C. EX., BOMBAY

Order No. 380/94-C, dated 23-12-1994 in Appeal No. E/2011/88-C

Cases Quoted

G. Claridge & Co. Ltd. v. Collector — 1991 (52) ELT 341                                                         [Paras 3, 4, 6]

Kochar Trading Co. v. Collector — 1991 (52) ELT 314                                                                        [Para 7]

Advocated By : Shri Gopal Prasad, Consultant, for the Appellant.

 Shri Somesh Arora, JDR, for the Respondents.

[Order per : S.L. Peeran, Member (J)]. - This appeal arises from the order dated 2-12-1987 passed by Collector (Appeals), Bombay holding the product Multiwall Paper Bags (Printed) and Multiwall Paper Bags (unprinted) as classifiable under residuary sub-heading 4818.90 and rejected the claim for classification under sub-heading 4818.12 for printed bags, and sub-heading 4818.19 for unprinted bags.

2. The ld. Collector has held that sub-heading 4818.12 is not stretchable beyond the scope of Heading 48.18 because it is only a sub-classification. He has held that the impugned product is no doubt a kind of container, as the appellants have claimed as per the “glossary of packing terms” or the publication of “small industry research institute”, but being flexible or non-rigid bags, they do not fit the description such as in cartons, boxes, containers and cases (including flattened or folded boxes and flattened or folded cartons). He has further held that the group of products covered by 48.18 clearly excludes non-rigid containers like bags, because it refers to such container which may be in assembled or unassembled containers. Sub-heading 4818.11 which covers cartons, boxes etc. intended for packing of match sticks and sub-heading 4818.13 meant for cartons, boxes and cases, define the limits of containers covered by 4818.12. Therefore, the ld. Collector has held that the bags in the present case, is not cartons and boxes and hence has rejected the appellant’s case.

3. We have heard Shri Gopal Prasad, ld. Consultant for the appellant and Shri Somesh Arora, ld. JDR for the Revenue. Shri Gopal Prasad submitted that identical goods has been classified in other Collectorates under sub-heading 4818.12 (printed bags) and 4818.19 for unprinted bags. He submitted that the Collector had accepted the appellant’s contention that the bags are a kind of “container” but at the same time, he has upheld the order of the Asstt. Collector and hence it discloses non-application of mind. He submitted that the term “containers” cannot be restricted to “non-flexible” containers and such a view is without any substance. The sub-heading contains no such re- striction or definition. He submitted that in the absence of any definition of the said term in the Tariff itself, the meaning cannot be given a restricted meaning and that commercial understanding of the product is required to be accepted. In this context, he relied on the definition of the term “bag” at page 218 appe- aring in “1985" Annual Book of ASTM Standards; as appearing in ”The Wiley Encyclopedia of Packaging Technology" by Marilyn Bakker; as appearing in “Glossary of Packaging Terms” Sixth Edition complied and published by “The Packaging Institute International, 20 Summer Street, Stamford, Connecticut 06901" and of the term `Rigid Paper Container’ as appearing in IS:7186-1973 of Indian Standard Glossary of Terms Relating to Paper and Flexible Packaging.

He submitted that by reading these definitions it is very clear that bag is a container. He argued that between single dash heading 4818.10 & 4818.90; the specific entry is 4818.10, as 4818.90 is a residuary one. He again contended that likewise Double dash sub-heading 4818.12 is very specific, as a container made out of a material specified in that sub-heading cannot be classified under this specific sub-heading. He submitted that double dash 4818.12, inter alia, refers to cartons made from kraft paper. While cartons, bags etc. made from a paper (as opposed to a carton or bag made from paper board) can never be a rigid packing. A paper carton or a container has to be flexible packing. Therefore, he contended that the container made from paper can never be a rigid container and hence the ld. Collector had made a fundamental error. He drew support from the ruling of the Hon’ble Supreme Court as rendered in the case of G. Claridge & Co. Ltd. v. CCE - 1991 (52) ELT 341 para 9.

4. Ld. JDR submitted that the Hon’ble Supreme Court had held that egg tray is not a container and the principle of ejusdem-generis applies to the facts of the present case and hence the claim of the appellants is to be rejected by accepting the ld. Collector’s reasoning. He relied on the ruling of the Hon’ble Supreme Court as rendered in the case of G. Claridge’s case.

5. We have carefully considered the submissions made by both the sides and perused the literature and the citation produced before us. The Tariff Heading 48.18 of the relevant period reads as follows :

“48.18 Other articles of paper pulp, paper, paper-board, cellulose wadding or webs of cellulose fibres - cartons, boxes, containers and cases (including flattened or folded boxes and flattened or folded cartons), whether in assembled or unassembled condition :

4818.11 - Intended for packing of match sticks

4818.12 - Printed cartons, boxes, containers and cases, made wholly out of paper or paperboard of heading No. or sub-heading No. 48.04, 4805.11, 4805.19, 4807.92,

48.08 or 4811.10 as the case may be

4818.13 - Other printed cartons, boxes and cases

4818.19 - Other

4818.20 - Toilet tissues, handkerchiefs and cleansing tissues of paper

4818.90 - Other".

The IS : 7186-1973 in para 2.129 defines :

Rigid Paper Container as

“A paper container that is supplied open, rigid and nested having a reinforced base and made mainly grease proof and vegetable Parchment papers for the packing of such commodities as edible fats”.

The definition of the term `bag’ at page 218 of 1985 Annual Book of ASTM Standards given is as follows :

“bag, n - a preformed container of tubular construction made of flexible material, generally enclosed on all sides except one forming an opening that may or may not be sealed after filling (see also pouch).

NOTE - A bag may be made of any flexible material or multiple plies of the same, or combination of various flexible materials. The term bag is used as a synonym for sack, but the term sack generally refers to the heavier duty or shipping sacks. It is made in various standard styles and may be open mouth or value type. The five basic standard types of bags are (1) grocery bag (2) merchandise paper, (3) industrial, (4) textile, and (5) paper shipping sack."

The definition of the term `Bags, paper’ as appearing in “The Wiley Encyclopedia of Packaging Technology”, is as follows :

“Billions (10⁹) of paper bags are produced annually for packing industrial and consumer products. On going improvements in barrier plies, coatings, closures, printing technologies, and packaging machinery contribute to paper packaging’s continuing prominence and growth potential in the market place. A paper bag, or sack, is generally defined as a non-rigid paper container made by forming a tube with one or both ends closed, with an opening to introduce the product to be packaged. They are usually classified into two types : small paper bags, with capacities of less than 2516 (11.3 kg.) generally for consumer products, and multiwall bags, generally for industrial products, with capacities of 25-110 lb (11.3-49.9 kg.). Super market carry out bags are not included here”.

The definition of the term `container’ at page 46 of `Glossary of Packaging Terms’ reads :

“Container. (1) In general any receptacle or enclosure used in packaging and shipping (2) Relatively large, reusable enclosures to be fitted with smaller packages and discrete objects, to consolidate shipments and allow transport on railway flat cars, flat bed trailers, aircraft, in ships’ hold or as deck loads etc”.

The definition of “rigid container” and “rigid paper container” at page 195 is as follows :

“rigid container. (1) A package or container made of relatively unyielding materials that require tools and power of high temperatures to change their configuration, chiefly metals or ceramics (which includes glass). A package that, after filling and closing, requires force generally greater than manual strength to change its shape or configuration, even if the package has been fabricated from materials that, like paperboard would normally be regarded as somewhat flexible. (2) A set up paper box.

rigid paper container. A paper container that is supplied open, rigid and nested, having a reinforced base and made mainly from grease, proof and vegetable parchment papers for the packaging of edible fats and similar products".

6. The Hon’ble Supreme Court in the case of G. Claridge and Co. Ltd’s case in para 8 to 11 at pages 344 to 346 has held as follows :

* * * * * * *

The Hon’ble Supreme Court, in the context of the technical literature has held that a moulded pulp “egg tray” are not `containers’. Therefore, we have to examine this case also in the context of the literature and the above reasoning of Hon’ble Supreme Court. The Hon’ble Supreme Court analysing the definition of the expression `container’ in Heading 48.18 has held that the expression has been used in the broad sense to include all receptacles or in a narrower sense to mean those receptacles in which the articles are covered or enclosed and transported. The Hon’ble Supreme Court has further held that considering the expression “containers” in the context in which it is used in the relevant tariff item, the said expression has to be construed to mean `packing containers’ which are analogous to boxes and cartons, that is, as enclosed receptacle, which can be used for storage and transportation of articles. Now it is to be seen as to whether multiwall paper bags fall within the term `container’. Although the definition of the term does state that the bag is used for packaging purpose and that it is defined as a non-rigid paper container, but yet in the context of the ruling of Hon’ble Supreme Court, bags, do not fall in line with boxes and cartons. The Hon’ble Supreme Court has also observed as noted in the para 9 as

“It is well accepted canon of statutory construction that when two or more words which are susceptible of analogous meaning or coupled together they are understood to be used in the cognate sense”.

It follows that the container has to be read in the context of the analogous expression to boxes and cartons. Therefore, in the light of this ruling, multiwall paper bags do not fall within the definition of boxes and cartons. The bag may be a container but in the context of the expression used in the tariff 4818, they do not fall in time with boxes and cartons, which are necessary of rigid type and used for transportation in rail, flat cars, flatbeds trailers, aircrafts, in ship holds or as deck loads (see definition of `container’ as given in Glossary of Packaging Term’). This definition of container clearly indicates that it is of reusable type and it necessarily have to be of rigid one.

7. The Tribunal in the case of Kochar Trading Co. v. Collector of Customs as reported in 1991 (52) ELT 314 at para 9 after taking into consideration various definitions of the term `basket’ and `bag’ has held that `basket’ and `bag’ is not included in the term `Carton’. Therefore, applying the ratio of these two rulings, it can be safely held that multiwalled paper bag is not a carton and a box. The classification of products under 4818.12 and 4818.19 has necessarily to be of a rigid type manufacture from paperboard. The product in question being of a non-rigid paper, the ld. Collector was justified in rejecting the claim of the appellants.

8. In the result, there is no merit in this appeal and the same is rejected.

9. [Assent per : S.K. Bhatnagar, Vice President]. - With due respects to Hon’ble Member (J) my views and orders are as follows :

10. I observe that bags including paper bags (whether multiwalled or not and printed or not) are undoubtedly and indisputably containers but in view of the Hon’ble Supreme Court’s judgment in the case of G. Claridge’s and Company Ltd. (supra) what we have to really see in as to whether the multiwalled paper bags in question were containers of a type covered by heading 4818.12. Learned Counsel has forciably argued that paper cartons or these kraft paper cartons for that matter cannot be rigid and therefore inclusion of containers etc. made of such material show that rigidity or flexibility is not a criterion for inclusion or exclusion under the single dash sub-heading. This plea has a lot of force. However, the bags in question have not been shown to be of a type similar to cartons, boxes or cases (which are generally closed/closable on all sides). Hence even accepting the Learned Counsel’s arguments that degree of rigidity or flexibility by itself cannot be the sole criterion, these bags which are flexible containers open on one side would normally not be covered by Heading 4818.12 (or 4818.13 for that matter) being quite dis-similar to cartons, boxes and cases. Hence a question arises as to in which alternative heading or sub-heading they would fall. In this connection the Learned Counsel’s arguments that since containers are included in the single dash heading therefore the sub-classification has to be considered with in that single dash heading by applying the appropriate double dash heading would have had a lot of force only if the products were containers of a type included or covered by the single dash heading.

11. But once the word container in the single dash heading has been interpreted to exclude such bags there is no bar to looking at the other single dash sub-headings within the main Heading of 48.18 (about which there is no dispute).

12. Learned Counsel’s point that bags were specifically included along with cartons, boxes and cases under 48.19 with effect from 1-3-1988 only strengthens the argument that before this date they were not in the corresponding heading of 48.18 (single dash sub-heading) and our case pertains to the period prior to the amendment. In the circumstances there is no other alternative but to classify the products under 4818.90 as has been done by the authorities below.

13. Therefore, there is no reason to interfere with the order passed.

14. Hence I agree with the Learned Member (J) that the appeal is liable to be rejected.

15. It is ordered accordingly.

Equivalent 1995 (76) ELT 350 (Tribunal)