UNION OF INDIA AND ORS versus NANDI PRINTERS PVT. LTD.

KIRPAL, J. The respondent herein at his printing press manufactures playing card~ as well as printed cartons. Playing cards fall under Tariff 56 of the Tariff Act, while printed cartons fall under Tariff Item 68. question for consideration in this appeal is whether for the purpose of of excise duty on the manufacture of printed cards the respondent can regarded as a small scale industry or not. The answer to that question depends on whether the value of the printed cartons can be taken into consideration even though by Notification No. 89/79 levy of excise duty manufacture of printed cartons was exempted.

p. 331, margin A

The excise authorities came to the conclusion that taking into consideration the aggregate value of the goods cleared, i.e., playing cards plus printed cartons the respondent could not be regarded as a small industry. This was so stated even in the show cause notice which was to the respondent and it was clearly mentioned therein that in the preceding financial year, that is to say, 1979-80, the turnover of the respondent exceeded Rs. 20 lakhs.

p. 331, margin B

The decision of the excise authorities was challenged by way of a writ petition filed by the respondent. The Single Judge as well as the division bench were of the opinion that the respondent was entitled to the benefit Notification No. 80/80 dated 19.6.1980 and in respect of the playing cards no excise duty would be payable because the aggregate value clearances of the playing cards was less than Rs. 20 laks as, in the opinion of the High Court, the clearances in respect of printed cartons could taken into consideration. Hence, this appeal.

p. 331, margin D

The aforesaid Notification dated l 9.6.1980 mentions that excisable of the description specified in column (3) of the Table annexed thereto, excisable goods are referred to as 'specified goods', are exempted.from of exCise duty when cleared for home consumption subject to the conditions mentioned in the said Notification. This Notification will not apply cases falling under clause (2) thereof which reads as follows :

p. 331, margin E

"2. Nothing contained in· this notification shall apply to a manufacturer: (i) if the aggregate value of clearances of the specified goods, if by him or on his behalf, for home consumption, from one or factories, during the preceding financial year, had exceeded rupees fifteen lakhs; (ii) who manufacturers excisable goods falling under more then Item Number of the said First Schedule and the aggregate clearances of all excisable goods by him or on his behalf consumption, from one or more factories, during the preceding

pp. 331–332, margin G

year, had exceeded rupees twenty lakhs."

p. 332, margin A

On facts, there is no dispute that in the previous year 1979-80 clearance in respect of playing cards was Rs. 14,11,467.35 while in printed cartons the figure came to Rs. 10,93,846.04. As has already noticed, no excise duty was payable on this value of Rs. 10,93,846.04 view of the Exemption Notification No. 89/79.

p. 332, margin A

The High Court appears to have overlooked the fact that clause the Notification dated 19.6.1980 denies the benefit of the said Notification to a manufacturer whose excisable goods falling under more than exceed Rs. 20 lakhs. This Court in Collector of Central Excise, Hyderabad v. VazirSultan Tobacco Co. Ltd, (1996) 83 ELT 3 at page IO, while referring to an earlier decision in the case of Wallace Flour Mills Company v. of Central Excise, [ 1989) 44 EL T 598, observed that if by virtue of exemption notification the rate of duty was reduced to NIL specified in the Tariff Act would still be regarded as excisable goods which NIL rate of duty was payable. To the same effect is the decision of this Court in Vee Kayan Industries v. Collector of Central Excise, Chandigarh, [ 1996) 83 EL T 262.

p. 332, margin B

It is true that printed cartons are not specified goods as contemplated by the said notification dated 19 .6.1980, but clause (2) of the said notification refers to excisable goods falling under more than one item of the First Both, playing cards which fall under Tariff Item 56 and printed cartons come under Tariff Item 68, are excisable goods even though the rate on each of them may be different. The mere fact that the rate of printed cartens was NIL by reason of an exemption notification make printed cartons non-excisable goods. The excise authorities were, right in aggregating the value of the turnover of the two items and to the conclusion that the respondent was not a small scale industry was entitled to the benefit of Notification dated 19.6.1980 in clearances of playing cards.

p. 332, margin E

For the aforesaid reasons, this appeal is allowed and the judgment of the Single Judge as well as that of the Division Bench are set aside.

p. 332, margin G

There will be no order as to costs. V.S.S. Appeal

p. 332, margin G