Top Stories Manufacture of Display Material falls under ‘Trading Advertising Material’, attracts Nil Rate of Duty: CESTAT [Read Order] Manufacture of display material falls under sub chapter ‘Trading Advertising material’ attracting nil rate of duty, rules CESTAT By Kalyani B. Nair – On June 6, 2024 8:52 am – 2 mins read

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the Manufacture of display material falls under ‘Trading Advertising material’ thereby attracting nil rate of duty. On completion of investigation, show-cause notice was issued to the appellant with a proposal to consider the process undertaken to manufacture display/storage materials be held as amounting to manufacture under Section 2(f) of the Central Excise Act, 1944 and proposed classification of the goods manufactured mentioned above under Chapter 9403 of Central Excise Tariff Act, 1985; Central Excise duty amounting to Rs.12,41,79,057/- on the value of the excisable goods manufactured and cleared during the period October 2009 to March 2014 proposed to be recovered with interest and penalty.

The counsel for the appellant referring to Note 2 to Chapter 49 submitted that the description of the goods under Chapter 49.11 and comparing with description of goods under Chapter 9403 they have submitted that in confirming the demand, the learned Commissioner ignored the main or primary purpose of the goods was to store/stack the products for the retail sale and not for just advertising. It was submitted that if such a finding is accepted, then the customers could have brought tracks, cabinet with shelves, etc., from the furniture manufacturers rather than placing orders on the appellants. Therefore, the conclusion of the Commissioner classifying the goods as ‘other furniture’ is baseless, illogical, contrary to the facts of the case and hence not sustainable. In the impugned order no specific adding has been assigned to each of the products.

The authorized representative submitted that the Commissioner taking into account the evidences concluded that the activity of the appellant resulted into manufacture, hence they were liable to discharge duty with interest and penalty on the Company and the Director. Rebutting the contention of the appellant, the AR for the Revenue has submitted that goods supplied by the appellants are complete in all respects.

A Two-Member Bench comprising DM Misra, Judicial Member and R DM Misraevi, Technical Member observed that “Applying the meaning of ‘Furniture’ as explained by the Hon’ble Supreme Court to the case in hand, it cannot be construed that the display material which has been supplied by the appellant after procuring skeleton- fabricated frames and affixing/pasting the printed material on the same in their premises would result into ‘manufacture’ of furniture. On the other hand, the purpose and object of the supply of the said printed materials on the procured frames by the appellant would safely be considered as for the primary purpose of advertisement and covered under the scope of Tariff Subheading 4911 1090 as ‘Trading Advertising material’