Hindustan Thermo Prints vs Collector of Customs>1987(10)LCX0019

1987(10)LCX0019

BEFORE THE CEGAT, SPECIAL BENCH ‘D’, NEW DELHI

S/Shri G. Sankaran, Senior Vice-President and V.T. Raghavachari, Member (J)

HINDUSTAN THERMO PRINTS

Versus

COLLECTOR OF CUSTOMS

Order No. 779/87-D, dated 5-10-1987 in Appeal No. CD/SB/A. No. 696/82-D

Advocated By: Shri M.A. Rangaswamy and Ms. Radha Rangaswamy, Advocates, for the Appellant.

Shri Vineet Kumar, SDR, for the Respondent.

[Order per: G. Sankaran, Sr. Vice-President]. - M/s. Hindustan Thermo Prints Ltd. New Delhi imported at Calcutta Port a consignment of 295 reels of “Base Paper furnish 60% Mechanical substance 63.5 GSM” and presented a Bill of Entry for clearance of the goods. The customs authorities classified the goods under heading No. 48.01/21(1) of the First Schedule (hereinafter referred to as the Schedule) to the Customs Tariff Act, 1975. The appellants represented against the said classification and sought classification and assessment under heading No. 48.01/21(3) of the Schedule as “other printing and writing paper”, on the ground that the imported paper has specific properties which rendered its use exclusively for vapour phase heat transfer printing possible. It was also stated that the paper would be used in the appellant’s flexographic paper printing press to manufacture heat transfer printing paper which, in turn, would transfer designs on to polyster fabrics involving transfer of dyes to the extent of nearly 90%. It was urged that since the process of manufacture of heat transfer paper involved printing in a flexographic machine, the imported paper should be considered as a printing paper under heading No. 48.01/21(3) of the Schedule and not consigned to the residual heading 48.01/21(1) “not elsewhere specified”. After considering these contentions, the Collector, by his order dated 24.11.1981, rejected the appellant’s claim and held that classification under heading No. 48.01/21(1) of the Schedule was in order. This order which was challenged in appeal before the Central Board of Excise and Customs was confirmed by the Board. Aggrieved by the Board’s order, the appellants filed a revision application under Section 131 of the Customs Act as it stood at the material time. The application has come on transfer to this tribunal under Section 131B of the Act to be disposed of as if it were an appeal filed before the Tribunal.

2. We have heard Shri M.A. Rangaswamy, Advocate, with Ms Radha Rangaswamy, Advocate, for the appellants and Shri Vineet Kumar, SDR, for the respondent.

3. The appellants have included in the paper book a write-up dated 17-12-1981 on the product by the manufacturers. It is, however, seen that this write-up has come into existence after the Collector passed the order-in-original. Further, as seen from the Board’s order-in-appeal, this write-up was not produced before the Board. In other words, neither the Collector nor the Board had occasion to consider this write-up. The appellants have also not taken the requisite steps by way of an appropriate application for permission of this Tribunal to have the documents admitted as additional evidence. In the circumstances, we cannot look into this document at this stage.

4. It is Shri Rangaswamy’s contention that the concept of ordinary printing or ordinary commercial use are extraneous considerations in construing heading 48.01/ 21(3) for “other printing and writing paper”. In other words, all sorts of printing paper other than news-print covered by sub-heading (2) fall for classification under sub-heading (3). Nor, Shri Rangaswamy rightly contends, is the price factor or the Import Trade Control Policy classification of the goods, decisive of the Customs tariff classification of the goods. Shri Rangaswamy points out that, in the impugned order, the Board holds that the process of printing on the subject paper is carried out by a flexographic machine and not an ordinary printing machine. The higher price element makes the paper suitable only for this particular type of Thermo-Printing. Thereafter the order proceeds to say that in the Customs Tariff Schedule under sub-heading (3) of Heading 48.01/21, the reference to “other printing and writing paper” - could only be in the context of “newsprint” covered by sub-heading (2) and that, because of this, sub-heading (3) would not cover paper of the type under consideration. Elsewhere, the Board has, in its order, noted that “the paper in question has also been specially prepared by an admixture of sulphide and sulphate pulp so as to give it a greater porosity, permitting dyes used in designs printed on it to be transferred to synthetic textile fabrics by a different process. The design itself is embedded on the paper by first drawing up the design manually and getting the design transferred to fabre glass sleerings through laser beams controlled by a computer system. This design is then transferred on to the paper by a printing process and the paper is thereafter used for transferring the design on to the synthetic fabrics.” It is in the context of this special type of printing involved that the Board has looked at the question whether from the point of view of the customs tariff, sub-heading (3) would cover only printing paper as ordinarily understood in commerce. The Board takes into account the fact that the printing machine is not an ordinary one but a specialised machine, namely flexographic machine. Then it takes note of the higher price element making the paper not suitable for ordinary printing but only for specialised process of thermo-printing. The Collector, in his order, has taken note of a letter dated 7-6-1981 from the manufacturer, certifying that the product is classified as a sensitized base paper for heat transfer printing. The Collector has referred to an explanatory note to Heading No. 48.13 of the CCCN (Customs Co-operation Council Nomenclature) under the description ‘Heat Transfer Papers and takes the view that the subject product is akin to heat transfer papers. Referring to this observation of the Collector, the Board has accepted the appellant’s contention that the Collector was not right in training the subject paper on par with the heat transfer paper. In short, the reasons for the Board holding that the subject paper as not a printing paper appear to be the price factor apart from the consideration that it is not ordinary printing paper as generally understood in trade nor is the process of printing the ordinary process of printing as generally understood.

5. The Departmental representative contends that printing paper is one on which printing is done and not one which prints on other surfaces.

6. On a consideration of the submissions made before us, we are of the opinion that neither the price factor nor the serial number under which the import Control Licence for the import of the present goods was issued, are relevant, much less decisive, considerations for the classification of the present goods. However, as seen from the Collector’s order, the appellants had produced before him a write-up by the manufacturers on the product (this has not been produced before us) to the effect that the paper acts as a medium for transfer and printing on to fabrics. The manufacturer had further certified that the product is a sensitized base paper for manufacture of heat transfer (paper). It is no doubt true, as Shri Rangaswamy contends, that the term “printing paper” has not been defined in the tariff. There is no tangible evidence on record to show that the subject goods are recognized in international trade as printing paper. On the other hand, the Explanatory Notes to the Customs Co-operation Council Nomenclature (CCCN) (which are, no doubt not of a binding nature but are of persuasive value in interpreting the entries in the Customs Tariff Schedule which is patterned on the CCCN) show several examples of what constitutes “printing and writing paper”. The examples given are : wove paper, laid paper, mould-made paper (imitation hand-made paper), featherweight paper, esparto paper, typewriter paper, duplicating paper, poster paper, bible paper (India paper), bank papers, bank-note papers, imitation art paper.

(See page 671 of Vol. II of CCCN Explanatory Notes, Second Edition, 1966)

The subject goods do not appear to fall in the group of papers exemplified by these illustrative examples. As already noted, the manufacturers, in their write-up produced before the Collector, had described the goods as a sensitized base paper for manufacture of heat transfer (paper). Now heat transfer papers are shown in the C.C.C.N. Explanatory Notes to fall in the category of papers under heading 48.13 which reads as follows :-

“Carbon and other copying papers (including Duplicator Stencils) and Transfer Paper, cut to size, whether or not put up in boxes”

The brief notes on Heat Transfer Papers reads as follows :-

“These are coated on one side with a thermosensitive substance, for use in an infra-red copying machine to make a copy of an original document by transferring a dye compounded with the coating substance on to a sheet of ordinary paper (heat transfer process)”

(Seep. 685 CCCN Explanatory Notes Vol. 2, 2nd Edition, 1966)

The notes further indicate that copying and transfer papers, bearing texts or designs for reproduction, remain classified in this heading, whether or not bound in sequence. Though the present goods are not exactly identical to heat transfer papers used in infra-red copying machine, they are akin to them in that by application of heat and pressure, the design on the paper is transferred to the fabric. We are, therefore, of the opinion that this is a better heading than “printing paper” to cover the subject product. On this basis, the appropriate classification under the Customs Tariff Schedule would be 48.01/21(1). In this view of the matter, the impugned order is upheld and this appeal is dismissed.

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Equivalent 1989 (43) ELT 121 (Tribunal)