Important Point
It is settled law that when entries in HSN and the said Tariff are not aligned, reliance cannot be placed upon HSN for the purpose of classification of goods under the said Tariff.

Judgment

Ashok Bhan, J. —

1.These three sets of appeals arise from a common Judgment and Order dated 30th April, 2002 passed by the Customs, Excise & Gold (Control) Appellate Tribunal, Western Zonal Bench at Mumbai (for short “the Tribunal”).

2.The first set of appeals being C.A. Nos. 4507-4508 of 2002 has been filed by M/s. Camlin Limited (hereinafter referred to as “the Assessee”), whereas the remaining two sets of appeals being C.A. Nos. 1692-1693 of 2003 & C.A. No. 978 of 2005 have been filed by the Revenue.

3.The issues in these appeals are regarding the classification of the “writing inks” being manufactured and captively consumed by the assessee and consequent demand of duty thereon. The inks with their constituents are:-

No. NAME OF THE INKS INGREDIENTS

1.99-Marker Inksi) Ketonic Solvent

ii) Solvent Dyes

iii) Binders

2.100-Camel Fount Drawing Inki) Carbon Black (Pigment)

ii) Shellac Binder

iii)Water & Preservatives

3.07-Camel Waterproofi) Carbon Black (Pigment)

Drawing Ink ii) Shellac Binder

iii)Water & Preservatives

4.09-Camel Spl. Drawingi) Carbon Black (Pigment)

Ink Black ii) Shellac Binder

iii)Water & Preservatives

5.98- Camel Papidurgraph i) Carbon Black (Pigment)

Ink Blackii) Shellac Binder

iii)Water & Preservatives

6.75- Designersi) Carbon Black (Pigment)

Indian Ink Black ii) Shellac Binder

iii)Water & Preservatives

7.75A- Designers’ i) Carbon Black (Pigment)

Indian Ink Black ii) Shellac Binder

iii)Water & Preservatives

8.75B - DESIGNERS’ i) Carbon Black (Pigment)

Indian Ink Black ii) Shellac Binder

iii)Water & Preservatives

9.Sketching Pen Inki) Acid Dyes

ii) Basic Dyes

iii)Food Colours

iv) Water

v) Hygroscopic Agents

(such as GLYCOLS)

4.The finding of the Tribunal qua items mentioned at serial nos. 2 to 9 in the above chart is that they are “writing inks” and, therefore, exigible to nil rate of duty. With regard to the item at serial no. 1, i.e., “marker ink”, the Tribunal has held that the same are not “writing inks” and, therefore, would be covered by Chapter sub-heading 3215.90 and, consequently, exigible to 16% of excise duty. Chapter heading 32.15 reads as under: -

“32.15 Printing ink, writing or drawing ink and other inks, whether or not concentrated or solid.

3215.10 - Writing ink Nil

3215.90 - Other 16%”

5.Initially, the department had approved the classification list submitted by the assessee. According to the assessee, as the classification of the inks manufactured by the assessee had been approved by the revenue, it neither collected any duty from its customers nor claimed any Modvat. Subsequently, the revenue challenged the said approved classification list.

6.The assessee manufactures various kinds of marker pens and sketch pen sets. As per the CBEC Trade Notice reported in (39) ELT-T6, it has been clarified that “marker pens”, Hi-liter pens, up-liners were “all” different categories of pens. According to the assessee, since various types of inks mentioned aforesaid are used in one or other types of pens which are instruments for writing such inks are to be considered as “writing inks”.

7.It is submitted that initially all types of inks falling under the aforesaid Chapter Heading no. 32.15 were chargeable to duty @ 20%. Subsequently, w.e.f. 1st March, 1997, Chapter Heading no. 32.15 has been revised and accordingly “writing ink” is now classifiable under CSH 3215.10 chargeable to duty at nil rate and all varieties of ink other than “writing inks” are classifiable under CSH no. 3215.90 chargeable to duty @ 16%.

8.According to the assessee, the legislative intent of the aforesaid amendment was that the units manufacturing pens which are assessed to nil rate of duty should not be paying duty on the inks filled/used in the pens. As the pens manufactured by the assessee are assessed at nil rate, the submission is that the writing inks which are used in these pens are not exigible to the levy of duty. This submission is made on the basis of the let