1988 (2) TMI 328 - AT - Central Excise

Issues: Classification for Central Excise duty of Printed Waxed Paper and Un-waxed Printed Paper cut into sheets and reels.

Analysis:
1. The primary issue in this appeal before the Appellate Tribunal CEGAT, New Delhi was the classification for Central Excise duty of the appellant's manufacture of Printed Waxed Paper and Un-waxed Printed Paper cut into sheets and reels. The question at hand was whether the goods should be classified under Tariff Item 68 as determined by the lower Appellate authority and the original authority, or under Tariff Item 17(2) and be exempt under Notification No. 63/82, dated 28.2.1982. The appellants had previously been classified under Tariff Item 17(2) and were paying duty until they sought exemption under a new notification. The Central Excise officers contended that the goods should be classified under Tariff Item 68 instead of Tariff Item 17(2. This led to a show cause notice being issued to the appellants, resulting in the present appeal to the Tribunal.

2. The appellants used duty paid Poster paper as the base material for their finished products. They had been classified under Tariff Item 17(2) and were availing concessional payment under a specific notification. However, a new notification granted full exemption to converted paper under Tariff Item 17(2) if made from duty paid base paper. The dispute arose when the Central Excise officers suggested that the goods should be classified under Tariff Item 68 instead. The Assistant Collector and the Collector of Central Excise (Appeals) upheld this classification, leading to the appeal before the Tribunal.

3. During the appeal hearing, the process of manufacture adopted by the appellants was explained. It was highlighted that duty paid base paper was printed according to customer specifications, cut, scored, or put into reels to create Un-waxed Printed Paper. For Waxed Printed Paper, after printing, the paper was subjected to waxing. There was a discrepancy in the sequence of the manufacturing process as presented by the lower Appellate authority, which was clarified during the hearing. The matter was not remanded for further clarification, and the appeal was decided based on the arguments presented.

4. The appellants' advocate relied on two decisions to support their argument regarding the classification of the goods. The first decision emphasized that Waxed Printed Paper falls under Tariff Item 17(2) and not Tariff Item 68. The second decision highlighted that certain printed products should be considered as products of the printing industry, which was relevant to the case at hand. The respondent, on the other hand, referred to a different decision where printed cartons were classified as products of the packing industry. However, the Tribunal concluded that the decisions cited by the appellants were applicable, leading to the classification of Waxed Printed Paper under Tariff Item 17(2) and Un-waxed Printed Paper under Tariff Item 68.

5. In conclusion, the Tribunal allowed the appeal, classifying Waxed Printed Paper under Tariff Item 17(2) and granting exemption under Notification No. 63/82, subject to conditions. Un-waxed Printed Paper was classified under Tariff Item 68, considering it as a product of the printing industry and eligible for exemption under the notification, subject to fulfillment of conditions. The decision was based on the precedents cited and the arguments presented during the appeal hearing.

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