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Playing cards, printed cartons excisable goods: SC

Our Legal Correspondent

NEW DELHI, Jan. 22

THE Supreme Court has held that both playing cards, which fall under the Tariff Item 56 of the Tariff Act and the printed cartons, which come under the Tariff Item 68, are excisable goods even though the rate of duty on each of them may be different.

``The mere fact the rate of duty on printed cartons was nil by reason of an exemption notification would not make printed cartons non-excisable goods'', the court said.

The ruling was given by a three-judge Bench comprising Mr Justice B.N. Kirpal, Mrs Justice Ruma Pal and Mr Justice Brijesh Kumar while allowing an appeal in the case of Union of India and others vs. Nandi Printers Pvt Ltd.

The respondent manufactures playing cards as well as printed cartons. Playing cards fall under the Tariff Item 56 of the Tariff Act, while printed cartons fall under the Tariff Item 68.

The question for consideration in the appeal was whether for the purpose of levy of excise duty on the manufacture of printed cards, the respondent could be regarded as a small-scale industry or not.

The answer to that question would depend on whether the value of the printed cartons could be taken into consideration even though by the notification No. 89/79 levy of excise duty on manufacture of printed cartons was exempted.

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-scale industry. This was so stated even in th e show-cause notice which was issued to the respondent and it was clearly mentioned therein that in the preceding financial year 1979-80, the turnover of the respondent had exceeded Rs 20 lakh.

The decision of the excise authorities was challenged by way of a writ petition filed by the respondent. A single judge of the Karnataka High Court as well as a Division Bench of the High Court were of the opinion that the respondent was entitled to the benefit of the notification No. 80/80 dated June 19, 1980, and in respect of the playing cards, no excise duty would be payable because of the aggregate value of the clearances of the playing cards was less that Rs 20 lakh as in the opinion of the High C ourt, the clearances in respect of printed cartons could not be taken into consideration. Hence, the appeal before the Supreme Court.

The Supreme Court, in its judgment, said that the notification dated June 19, 1980, mentioned that excisable goods of the description specified in Column (3) of the table annexed thereto, which excisable goods were referred to as `specified goods', are e xempted from levy of excise duty when cleared for home consumption subject to the conditions mentioned in the notification. This notification would not apply in the case falling under Clause (2) thereof, the court added.

On facts, the court said, there was no dispute that in the previous year -- 1979-80, the clearance in respect of playing cards was Rs 14,11,467, while in respect of printed cartons the figure came to Rs 10,93,846. As has already been noticed, no excise d uty was payable on this value of Rs 10,93,846 in view of the exemption notification No. 89/79.

``It is true that printed cartons are not specified goods as contemplated by the said notification dated June 19, 1980, but Clause (2) of the said notification refers to excisable goods falling under more than one item of the first schedule.

Both, playing cards which fall under the Tariff Item 68, are excisable goods even though the rate of duty on each of them may be different'' the court observed.

The court, therefore, said that the excise authorities were right in aggregating the value of the turnover of the two items and coming to the conclusion that the respondent was not a small-scale industry which was entitled to the benefit of the notificat ion dated June 19, 1980 in respect of clearances of playing cards.

In this view of the matter, the court set aside the judgment of the single judge as well as the Division Bench of the High Court.