Excise Duty not leviable by Student Almanac and Teacher Planner: CESTAT [Read Order]

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that no excise duty is required for teacher planners or student almanacs. The assessee's argument that the Student Almanac is a product of the printing industry because it is only used by students at a specific school is rejected by the two-member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member).

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Sona Printers Pvt. Ltd., the appellant/assessee, printed these items and removed them at no duty, classified them under Chapter 49 of the Central Excise Tariff Act, 1985 Schedule, which covers printed books, newspapers, photographs, and other printing-related products.  According to the Department, these products are subject to duty at a rate of 12.5% ad valorem under Chapter 48 as "Articles of Paper or of Paper Board."  Additionally, the department claims that the assessee failed to pay duty, which made the extended term of limitation applicable. As a result, the assessee's director was subject to a penalty under Rule 26 of the Central Excise Rules, 2002.

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The Joint Commissioner upheld the claim, added interest, and fined the assessee the same amount. In accordance with Rule 26 of the Rules, the Director was also fined Rs. 10,000.  Following an appeal, the Commissioner of Appeals maintained the demand confirmation for just two products—the teacher planner and the student almanac—and only for the standard time frame.  Both the penalty imposed on the assessee and the demand for a prolonged term of limitation were set aside by him.  Additionally, he overturned the fine levied against the assessee's director.

The submission of the authorized representative for the Revenue is that the assessee had not declared the production of these goods in its ER-1 returns and the department had no way of knowing that the assessee was manufacturing these goods on which it was not paying duty. It is also his submission that the assessee had not intimated the department in any other way about the manufacture of these goods and therefore, the assessee had an intention to evade payment of duty and for that reason the assessee had willfully suppressed facts.

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In this instance, the classification of the following items is at issue: calendars, notepads, student and teacher planners, scrapbooks, diaries, and workbooks.

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Since the assessee might have believed that the teacher planner and student almanac were exempt from duty and, as a result, were not declared in their excise returns, the Tribunal concurred with the Commissioner (Appeals) that there was no indication of an intention to avoid paying the duty or to conceal facts.

The Tribunal agreed with the finding of the Commissioner (Appeals) in the impugned order that there was no evidence of intention to evade payment of duty and suppression of facts because it was possible for the assessee to have entertained the belief that the Student Almanac and teacher planner were not exigible to duty and, therefore, to have NOT declared them in their excise returns.

The bench opined that there is no confiscation of the goods nor is there any allegation that any Cenvat credit has been wrongly taken. The Commissioner (Appeals) was correct in setting aside the penalty on the director under Rule 26 of the Rules, added the bench. In view of the above, the Tribunal dismissed the appeal.

To Read the full text of the Order CLICK HERE

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