Read:- 1. Application dated 7th
July, 2005
under Section 56 of the Maharashtra Value Added Tax Act,
2002 by M/s. Karan Enterprises.
2. This office letter dated 06/01/2006 and 16/1/2006
calling the applicant for hearing on 18/1/2006.
Heard:- Shri Ashok Parikh, Prop. and Shri R. S. Pathak,
S.T.P.
PROCEEDINGS
(Under Section 56 of the Maharashtra Value Added Tax Act,
2002)
No.DDQ-11-2005/Adm-5/46/B-
9 Mumbai, dt.
31/03/2006
An
application is received form M/s. Karan Enterprises, having
its office at 203, Keytuo Industrial Estate, Kondivita
Village Road., Next to PDI, Marol , MIDC, Andheri (East),
Mumbai 400 059. The applicant has sought to determine the
correct classification and rate of tax in respect of his
product “STANWHITE DM-01” -printing paste sold vide the
sales invoice No.48 dated
25/6/2005.
02. FACTS OF THE CASE
The applicant M/s. Karan Enterprises is an
importer of “textile printing inks”. The product is also
known in the trade as “printing paste”. The product is
water based but is in thick paste form having white colour.
It is mainly used for printing various designs, logos,
slogans, pictures, etc. on textile fabrics and readymade
garments with the help of screens. In commercial circles
and amongst many end users, the activity or process is
popularly called “Screen Printing”. The main ingredients of
the said white printing inks are acrylic binder and titanium
dioxide. In case of clear paste, acrylic binder is used.
However, in the market, there is another type of ink, which
has solvent oil base having PVC, plastisizer, solvents, etc.
as its main ingredients. Both these inks, irrespective of
whether they are water based or solvent based, can be used
for printing-screen printing on variety of substratum, such
as textiles, paper, plastic, etc.
Screen printing is one of the kinds of printing,
though the substratum of each differ. The method of screen
printing involves an activity wherein the material or the
substratum on which printing is to be done, is laid or
spread on a big-sized table. Thereafter, the screen on
which the required design is engraved, and which is in the
form of fine mesh with openings, is placed thereon. Inks
are spread on the screen and squeezed with the help of
rubber squeezer through the design of the screen so that the
ink gets deposited on the substratum used, which may be a
textile fabric, readymade garment (e.g. T. Shirts, banners,
paper, plastic sheets or goods, wedding cards, , etc.).
The said product is cleared by the applicant
from the Customs and the custom duty is assessed under the
Customs Tariff Head No. 3215.90. It is submitted by the
applicant that even the leading Indian manufacturers are
classifying the said product under the same Custom Tariff
Head. The foreign supplier of the applicant at Taiwan is
disputing the said classification. According to him, the
goods are fit to be covered by the Customs Tariff Code No.
38099.9100 which pertains to finishing agents, dye carriers
to accelerate the dyeing or fixing of dyestuffs and other
products and preparations, of a kind used in the textile,
paper, leather or like industries.
03.
CONTENTION AND HEARING
In order to confirm his belief regarding the
correct classification of his product, the present
application is being made.
On the above facts, it is argued by the
applicant that the product is covered by the Central Excise
Tariff heading 3215.90. It is brought to my notice that
even Customs have cleared the goods under the Central Excise
Tariff heading 3215.90. He further states that other Indian
manufacturers are clearing the goods under the Central
Excise Tariff heading 3215.90. It is the applicant’s
contention that, since the excise heading 3215.90 is covered
by the notification issued for the purpose of schedule entry
C-54, the same is covered by the scope of the schedule entry
C-54 which pertains to industrial inputs. Chapter heading
32.15 pertains to printing, writing or drawing and other
inks, whether or not concentrated or solid. It is argued
that the product is used for screen printing and can be used
to print on a wide variety of materials, mainly, fabrics and
readymade garments. The applicant, in his application,
further relies upon the dictionary meaning of the word
‘printing’ and the technical specifications of the product.
Shri Ashok Parikh, proprietor and Shri R. S.
Pathak, S.T.P attended the hearing on
18/1/2006.
The facts as mentioned in the application were reiterated
during the hearing.
In the alternative, it is argued that the
product may also be covered by the scope of the entry 77 of
schedule C of the Maharashtra Value Added Tax Act, 2002
which pertains to printing and writing inks including toner
and cartridge.
04.
OBSERVATIONS
I have gone through the applicant’s contention
and also scrutinized the details submitted by the
applicant. The applicant is an importer of the product
known as “STANWHITE DM-01”. The said product is cleared by
the Customs under the Customs Tariff heading 3215.90. The
Customs heading 32.15 pertains to printing inks, writing or
drawing inks and other inks whether or not concentrated or
solid. The scope of printing inks as described in the notes
to the HSN is as follows :-
|
32.15(A) |
Printing inks (or
colours) are pastes of varying consistency,
obtained
by mixing a finely
divided black or coloured pigment with a vehicle.
The pigment is usually
carbon black for black inks and may be organic or
inorganic for coloured inks. The vehicle consists of
either natural resins or synthetic polymers, dispersed
in oils or dissolved in solvents, and contains a small
quantity of additives to impart desired functional
properties. |
The applicant’s product is mainly used for
printing on textiles. It is used for printing various
designs, logos, pictures, etc., on textile fabrics and
readymade garments with the help of screens. This activity
is popularly called as “Screen Printing”. There is another
Entry 38.09 under the Customs Tariff. This heading pertains
to “ Finishing agents, dye carriers to accelerate the
dyeing or fixing of dyestuffs and other products and
preparations (for example, dressing and mordants), of a kind
used in the textile, paper, leather or like industries, not
elsewhere specified or included.”
It
requires now to decide whether the appropriate
classification of the applicant‘s product heading is 38.09
or 32.15. The description of sub-heading 38.09 will show
that the products which are classified under this heading
are mainly the finishing agents, dye carriers to accelerate
the dyeing or fixing of dyestuffs. The applicant‘s product
is certainly not a finishing agent. It is used for printing
on textiles and therefore, according to me, the appropriate
classification is 32.15 of the Customs Tariff Act.
Let me reproduce the heading 3215.90 as under
Central Excise and as appearing in our notifications dt.
1/4/2005 and 1/9/2005 issued for the purposes of the entry
C-54.
|
Central Excise
Heading 3215 |
Notification
dt.
1/4/2005
Sub-Heading 3215.90 |
Notification
dt.
1/9/2005
Heading 3215 |
|
Printing ink, writing or drawing
ink
and other inks, whether or
not
concentrated or solid. |
Printing ink whether or
not
concentrated or solid. |
Printing ink, writing
or
drawing ink, whether
or
not concentrated
or
solid. |
The Customs have cleared the said goods under
the Customs Tariff Heading 32.15. In view of the above, I
hereby hold that the applicant‘s product “STANWHITE” is
covered by the Customs Tariff heading 32.15. The heading
3215.90 is covered by the notification dated 1/4/2005 issued
for the purpose of the entry C-54 pertaining to industrial
inputs. This notification is for the period from 1/4/2005
to 31/8/2005. The heading is also covered by the new
notification dt. 1.9.2005 issued for the purposes of the
entry C-54. This new notification has replaced the earlier
notification dated 1/4/2005 w.e.f. 01/09/2005. The entire
excise heading of Chapter 32.15 gets covered by the new
notification dt. 1/9/2005 issued for the purposes of the
schedule entry C-54 on industrial inputs. The rules of
interpretation of the notifications state that, “where the
description against any heading or, sub-heading or as the
case may be, tariff items, matches fully with the
corresponding description in the Central Excise Tariff, then
all the commodities covered for the purposes of the said
tariff under that heading or sub-heading or as the case may
be, tariff item, will be covered by the scope of this
notification”.
In view of the above rule of interpretation, the
applicant’s product gets covered by the scope of both the
notifications [dt. 1/4/2005
and 1/9/2005].
05.
I therefore, hold that, the applicant’s product is covered
by the schedule entry C-54 of the Maharashtra Value Added
Tax Act, 2002 which pertains to industrial inputs w.e.f.
1.4.2005, thereby attracting a tax @ 4%.
In view of the discussion held hereinabove, I
proceed to pass an order as follows:
ORDER
(Under Section 56 of the Maharashtra Value Added Tax Act,
2002)
No.DDQ-11-2005/Adm-5/46/B-
09 Mumbai, dt. 31.03.2006
The applicant’s questions as regards whether the
product “STANWHITE-DM-01” sold vide the invoice No. 48 dt.
25/6/2005 of Rs. 3900/- is a printing ink covered within the
scope of the entry C-54 for industrial inputs is herewith
answered in the affirmative and the rate of tax thereon is
4%.
(B. C. KHATUA)
Commissioner of Sales Tax,
Maharashtra State, Mumbai.
