http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: M/S WARDEN & CO.(INDIA) PVT.LTD.

       Vs.

RESPONDENT: THE COLLECTOR OF CENTRAL EXCISE, THANE.

DATE OF JUDGMENT01/02/1995

BENCH: SINGH N.P. (J) BENCH: SINGH N.P. (J) AHMADI A.M. (CJ)

CITATION:  1995 SCC  Supl.  (1) 740 JT 1995 (2)    79  1995 SCALE  (1)405

ACT:

HEADNOTE:

JUDGMENT: 1.       This is an appeal under Section 35L of the  Central Excise  and Salt Act, 1944 (hereinafter referred to as  ’the Act’). 2.   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  ply  wood which  is  reinforced  with mild  steel  rings  and  clamps. According to the appellant, in the total weight of the fibre 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  the  paper  or paper board.  Commercially, it is known as a paper product. 3.   The  dispute is as to whether 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  Noti- fication  No.66 of 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 Notice 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:-               "sub-item(4)   covers   packing,    transport,               storage, or sale of merchandise whether or not               having   a  decorative  value,  bags,   canes,               packets,  sacks, boxes, cartons, drums  fitted               with reinforcing circular               81               bands  of other materials, tubular  containers               for posting documents, garment bags, the  like               are also covered under this subitem". The  Assistant  Collector of Central Excise however,  by  an

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

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 under Item No. 17(4).  In view of the  letter 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 representing 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  20.10.1982,  the  Assistant Collector  of Central Excise, held that Item No.  17(4)  and Notification No.66/82 were only applicable to such goods and articles  which were made exclusively out of paper or  paper board.   Aggrieved  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 classifiable  under Item No.17(4). The Collector of  Central Excise  (Appeals) referred to the composition of  the  fibre drum  and  the  aforesaid Trade Notice  in  support  of  his finding. 4.   The  Revenue  preferred an appeal before  the  Customs, Excise & Gold (Control) Appellate Tribunal (hereinafter  re- ferred  to  as ’the Tribunal’).  The Tribunal  came  to  the conclusion that the fibre drum manufactured by the appellant was  classifiable  under Item No.68 of  the  Central  Excise Tariff  and  not under Item No.17(4). On  that  finding  the order  of the Collector of Central Excise (Appeals) was  set aside. 5.   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. 17(4), when apart from  paper  or paper board, the lid and the bottom  of  the said  fibre drum are made of ply wood 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  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) ............................               (2).......................................               (3).......................................               (4)   Boxes,  cartons, bags and other  packing               containers (including flattened or TWENTY  TWO               folded  boxes  and flattened or folded  AND  A               HALF  cartons,  whether  or  not  printed  and               PERCENT whether in assessmbled or  unassembled               AD VALOREM condition." 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, paper board and all sorts  including paste board, mill board,  corrugated  board and  articles thereof have been specified in clauses 1 to  4 of  Item  No. 17.  It need not be pointed  out  that  boxes, cartons,  bags  and other packing containers,  mentioned  in Item No.17(4) must have been manu- 82 factured  out  of  paper or paper board.   But  if  just  to strengthen the packing container, a small piece of ply  wood or a steel ring is introduced, whether such packing contain-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

ers  shall  be out of the purview of Item  No.  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  ply  wood, reinforced with mild steel ring and clamp.  The Tribunal has also  mentioned in the impugned order that according to  the appellant,  in  terms  of  the  percentage  content,   paper constitutes  51.18%  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 said that the fibre drum which is a container is made of "paper and paper board, -ill 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  alongwith  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  or   paper   board constitutes  only  51.18% and the rest  48.82%  consists  of plywood content, rings and clamps etc,? 6.   On  behalf  of the appellant, it was pointed  out  that internationally, composite paper board drums and  containers even when they are fitted with reinforcing circular bands of other  materials, other than paper, e.g.  textile  backings, wooden supports,    string   handles,   metal   or   plastic corners,they  are  classified  under  heading  48.16   under Customs  Co-operation Nomenclature (CCCN - Brussels),  which is equivalent to Tariff Item No. 17(4). 7.   The Glossary of Terms relating to Paper and    Flexible Packaging issued by Indian    Standards  Institution  (IS  : 7186 -1973)    defines  ’Fibre  board Drum’ as  "a  shipping package with cylindrical sidewall composed of paper or board having disc ends of similar or different materials, 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 Packaging 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  that products covered by said Item No. 17 must be the product  of paper, paper board and all sorts. 8.  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:               "Articles  made  of plastics,  all  sons,  in-               cluding  tubes, rods, sheets,  foils,  sticks,               other  rectangular  or profile  shape  whether               laminated   or  not,  and  whether  rigid   or               flexible   including  lay  flat  tubings   and               polyinyl chlorides sheets......               In that connection, it was said:               "The learned Counsel Contended that the               83               plastic  torch 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               nonetheless retains the character of a plastic

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

             tube.   A  mere reference to Tariff  Item  No.               15A(2)  would show that the  articles  therein               described  are plastic material  in  different               shape and form and not articles made from such               plastic  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 a plastic tube is used for  manufacturing               plastic torch.  Articles 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 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) 9.   The Tribunal has placed reliance on the judgment in the case  of M/s.Indian Textile Paper Tube Company Ltd.   Madras v.  Collector of Central Excise,  Madurai  1984(18)E.L.T.35, where it was said that Vim Containers and Defence Containers cannot be said to be articles of paper or paper board;  they are  composite  containers made of paper,  paper  board  and other  metal components.  The material components like  lids and  bottoms  were made of tin plates and black  plates  and printed  aluminium 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), because 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 Containers having been made of tin plates and  black plates  with printed aluminium 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 Container and Defence Container.  The Tribunal has  rightly  come to the conclusion that such  fibre  drums shall  not  be covered by Item No. 17(4) and they  shall  be covered by residuary Item No.68. 10.  Accordingly, the appeal is dismissed.  The order of the Tribunal is upheld.  There will be no order as to costs. 84