Case Note & Summary
Background: The dispute concerned the correct classification under the Central Excise Tariff of a fibre drum manufactured by the appellant, a company engaged in manufacturing packing containers. The product consisted of a circular tube exclusively made of paper or paper board, with lid and bottom made of plywood reinforced with mild steel rings and clamps. In total weight and value, paper or paper board predominated, but the non-paper components were substantial. The litigation arose after the Assistant Collector initially accepted the appellant's classification under Tariff Item 17(4) and then reversed it. Facts: Prior to the Finance Act, 1982, the fibre drum was classified under residuary Item 68. After the Finance Act, 1982, the appellant sought classification under Item 17(4) and exemption under Notification No.66 of 1982. On 24.03.1982, the Assistant Collector approved the classification. However, on 14.04.1982, the Assistant Collector called for a revised classification list under Item 68, stating that the fibre drum was not made exclusively out of paper. The appellant filed revised classification list No.3/82 under protest. The Assistant Collector, by order dated 20.10.1982, held that Item 17(4) and Notification No.66/82 applied only to goods made exclusively of paper or paper board. The Collector of Central Excise (Appeals) allowed the appellant's appeal, holding that the fibre drum was classifiable under Item 17(4), relying on the composition and a Trade Notice. The Revenue appealed to the Customs, Excise & Gold (Control) Appellate Tribunal, which reversed the Collector (Appeals) and held the fibre drum classifiable under Item 68. Legal Issues: The central question was whether the fibre drum, which contained paper/paper board as 51.18% of its total composition and plywood, steel rings and clamps as the remaining 48.82%, fell within Tariff Item 17(4) as a packing container made of paper or paper board, or under the residuary Item 68. Arguments: The appellant argued that the drum was a packing container covered by the plain language of Item 17(4); the addition of small plywood and steel components for strengthening did not remove it from that item. It also relied on the Customs Co-operation Nomenclature (CCCN - Brussels) heading 48.16, which classified composite paper board drums fitted with reinforcing bands, and on the Indian Standards Institution Glossary (IS:7186-1973) defining a fibre board drum as having disc ends of similar or different materials. The Revenue contended that Item 17 required the product to be of paper, paper board and all sorts; a composite container with significant non-paper components could not be an article of paper or paper board, and relied on Geep Flashlight Industries Ltd. v. Union of India and M/s. Indian Textile Paper Tube Company Ltd. v. Collector of Central Excise. Court's Analysis: The Supreme Court examined Tariff Item 17 as a whole and held that to fall under Item 17, including sub-item (4), the product must be of paper, paper board and all sorts. The fibre drum had only 51.18% paper content; the rest 48.82% consisted of plywood, rings and clamps. The Court rejected the appellant's reliance on international nomenclature and the Indian Standards Institution glossary, stating that whatever the classification under CCCN, Tariff Item 17 clearly specified products of paper or paper board. It applied the interpretation from Geep Flashlight Industries that 'articles made of plastics' meant articles made wholly of that commodity, not articles made from plastics along with other materials. The Court also found no material difference between the fibre drum and the Vim Containers and Defence Containers considered in Indian Textile Paper Tube, where composite containers with tin plate lids and bottoms were held classifiable under Item 68. Decision: The appeal was dismissed and the Tribunal's order upheld. The fibre drum was held classifiable under residuary Item No.68, not under Tariff Item 17(4). No order as to costs.
Headnote
A) Central Excise - Tariff Classification - Composite Containers - Interpretation of 'Articles of Paper and Paper Board' under Tariff Item 17(4) of the Central Excise and Salt Act, 1944 - Fibre drum with paper content of only 51.18% and remaining 48.82% consisting of plywood, steel rings and clamps is not an article made wholly of paper or paper board and is classifiable under residuary Item 68 - Court held that Tariff Item 17 read as a whole requires the product to be of paper, paper board and all sorts; the introduction of substantial non-paper components removes the container from Item 17(4). (Paras 5-9) B) Precedent - Interpretation of Tariff Entries - 'Articles Made Of' Means Wholly of That Commodity - Central Excise and Salt Act, 1944, Tariff Item 15A(2) - The Court relied on Geep Flashlight Industries Ltd. v. Union of India to hold that articles made of a material must be wholly of that commodity, not articles made from that material along with other materials; this principle applied to exclude composite fibre drums from Item 17(4). (Paras 8-9)
Issue of Consideration
Whether the fibre drum manufactured by the appellant is classifiable under Tariff Item No. 17(4) of the Central Excise Tariff as an article of paper and paper board, or under the residuary Tariff Item No. 68, given that it contains plywood, mild steel rings and clamps in addition to paper/paper board.
Final Decision
The appeal was dismissed. The order of the Customs, Excise & Gold (Control) Appellate Tribunal was upheld, confirming that the fibre drum is classifiable under residuary Item No.68 and not under Tariff Item 17(4). There was no order as to costs.
Law Points
- To be covered by Tariff Item 17 including sub-item (4)
- product must be of paper
- paper board and all sorts
- articles made of a commodity mean articles made wholly of that commodity
- not articles made from that commodity along with other materials
- composite containers with significant non-paper components classifiable under residuary Item 68
- Tariff Item 17(4) covers packing containers manufactured out of paper or paper board
- but introduction of substantial non-paper components takes them out of that item
