Page 174 - GSTL_7th May 2020_Vol 36_Part 1

132 GST LAW TIMES [ Vol. 36
6. The issue involved in this case is regarding classification of “Tech-
nical Varnish” and “Medium” being used in printing industry.
As submitted by the applicant Ingredients of Printing ink is Solvent, Res-
in and various colours. The solvent, i.e. liquid organic compound (Tolune, Me-
thyl Ethyl Ketone etc.) is a clear, colourless liquid; this is transferred through
pipes and at a certain temperature resin is added to this solvent; resin is a bind-
ing material which is also a polymer product; this mixture after undergoing heat-
ing and cooling processes, is called as Technical Varnish; Colouring material, is
added to this mixture, and after undergoing certain processes, the final product
i.e. Printing ink/Packaging ink emerges.
1 8. The applicant has submitted that they clear ‘Printing ink’ and some-
times, depending upon the need, also supplies “technical varnish” to their cus-
tomers. When the applicant is supplying “Technical varnish” alone, then they
use the term “Medium”. The term “technical varnish” is used by M/s. Flint
Group, when it is used captively as an intermediatory product for manufacture
of ‘Printing ink’.
8.1 From the above it reveals that the “Medium”/“Technical varnish”
is independent product and is being sold to the printing industries. In the pro-
duction of printing ink, varnish can refer to either a combination of oils, resins,
waxes, solvents and other materials used as an ink vehicle. The use of varnish
tends to increase the gloss of a printed ink. ‘Technical Varnish’/‘Medium’ are
liquid used in printing ink. As such, ‘Technical Varnish’/‘Medium’ and ‘Printing
ink’ are having separate identity and, hence, both are distinct products.
9.1 It is observed that the Explanation (iii) and (iv) of the Notification
No. 1/2017-Central Tax (Rate), dated 28-6-2017 provides as follows :-
“Explanation. - For the purposes of this notification, -
(i) ……
(ii) ……
(iii) “Tariff item”, “sub-heading” “heading” and “Chapter” shall
mean respectively a tariff item, sub-heading, heading and
chapter as specified in the First Schedule to the Customs Tariff
Act, 1975 (51 of 1975).
(iv) The rules for the interpretation of the First Schedule to the
Customs Tariff Act, 1975 (51 of 1975), including the Section
and Chapter Notes and the General Explanatory Notes of the
First Schedule shall, so far as may be, apply to the interpreta-
tion of this notification.”
9.2 Further, Hon’ble Supreme Court in the case of L.M.L. Ltd. v. Com-
missioner of Customs [Civil Appeal No. 3764 of 2003, decided on 21-9-2010 report-
ed in 2010 (258) E.L.T. 321 (S.C.)] has held as follows :-
“12. In Collector of Central Excise, Shillong v. Wood Crafts Products Ltd. re-
ported in (1995) 3 SCC 454, it was held by this Court that as expressly stated
in the statements of objects and reasons of the Central Excise Tariff Act,
1985, the Central Excise Tariffs are based on the Harmonious System of
Nomenclature (HSN) and the internationally accepted nomenclature was
taken into account to reduce disputes on account of tariff classification. Ac-
cordingly, for resolving any dispute relating to tariff classification, a safe
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1 Paragraph number as per official text.
GST LAW TIMES  7th May 2020  174