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Issues involved: Quashing of impugned notices and orders, interpretation of Tariff Item 17(4) of the Central Excise Manual, liability for payment of excise duty on printed paper.
Judgment Summary: Quashing of Impugned Notices and Orders: The petitioner, a firm engaged in printing on papers, sought quashing of notices and orders issued by the respondents demanding payment of excise duty on printed paper. The Collector of Central Excise initially held that the paper processed by the petitioner was not liable for excise duty under Tariff Item No. 17(4). However, subsequent decisions by excise authorities upheld the demand for excise duty. The High Court held that the respondents erred in invoking Tariff Item 17(4) for demanding excise duty on the printed paper. The Court quashed the impugned notices and orders, ruling in favor of the petitioner. Interpretation of Tariff Item 17(4): The petitioner argued that the process of coloring or printing on one side of the paper does not constitute 'manufacture' of paper as defined in Section 2(f) of the Central Excises and Salt Act, 1944. The Court agreed with the petitioner, stating that coloring or printing on already manufactured paper does not fall under the scope of Tariff Item 17(4) which pertains to paper manufactured with the aid of power. The Court held that the petitioner is not liable to pay excise duty on the printed paper as there is no separate item for such duty. Liability for Payment of Excise Duty on Printed Paper: The Court noted that the goods in question had already suffered excise duty when sold to the petitioner by the manufacturer. As there is no specific provision for excise duty on printed paper, the petitioner was found not liable for payment of excise duty on the printed paper. The Court quashed the impugned notices and orders, making the Rule absolute with no order as to costs.
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