CAMLIN LTD. v. COMMNR. OF CENTRAL EXCISE, MUMBAI INSC 1493

CAMLIN LTD. v. COMMNR. OF CENTRAL EXCISE, MUMBAI INSC 1493

Facts:

Camlin Ltd. manufactured various types of inks, including marker inks, sketching pen inks, and other varieties, which were used in pens and other products.

The dispute arose over the classification of these inks under the Central Excise Tariff Act, 1985. The primary issue was whether the inks could be classified as "writing ink" (under Chapter Sub-Heading 3215.10 with a nil duty rate) or "other inks" (under 3215.90 with a duty rate of 16%).

The Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) held that marker inks fell under the residual entry (3215.90) and were subject to duty, whereas other inks manufactured by Camlin Ltd. were classified as writing inks.

Camlin Ltd. appealed against the decision concerning marker inks, while the Revenue Department challenged the decision regarding other inks.

Issue:

Are marker inks correctly classified under "other inks" (3215.90) and subject to 16% excise duty?

Should the remaining inks manufactured by Camlin Ltd. be classified as "writing inks" under 3215.10, exempt from duty?

Decision:

The Supreme Court ruled in favor of Camlin Ltd. regarding the classification of marker inks, reversing the Tribunal’s reliance on Harmonized System of Nomenclature (HSN) for classification. The remaining inks were also deemed to fall under "writing inks," exempt from excise duty.

The Court held that the entries in the Indian Central Excise Tariff Act differed from the HSN and that reliance on HSN alone for classification was incorrect.

Marker inks, being essential for writing instruments (e.g., marker pens), fell under the specific category of "writing inks" and were exempt from duty.

The legislative intent and common parlance understanding of "writing ink" were crucial in determining the classification.