1988 (10) TMI 204 - AT - Central Excise

Summary

Issues:
Whether polyethylene laminated kraft paper amounts to 'manufacture' and is excisable under the law.

Analysis:
The appeal was filed against the order of the Collector of Central Excise (Appeals), Madras to determine if polyethylene laminated kraft paper is subject to duty. The Collector (Appeals) held that such paper is not liable to duty again based on a previous ruling. However, the Appellate Tribunal considered the case law and held that laminating duty paid kraft paper constitutes 'manufacture' and is subject to duty under Tariff Item 17(2) of the Act. The Tribunal referenced the ruling of the Bombay High Court and the Supreme Court's affirmation of the same in a related case.

The Tribunal noted the argument of the learned SDR that the issue is covered by a previous ruling involving polyethylene coated sandwiched paper. The SDR cited the decision of the Bombay High Court, which was upheld by the Supreme Court in a separate case. The Tribunal acknowledged this precedent and applied it to the present case, emphasizing that the treatment of paper can amount to 'manufacture' for excise duty purposes.

The respondent's counsel referred to a ruling of the Andhra Pradesh High Court and the Madras High Court regarding the essential character of kraft paper when bonded with bitumen. The counsel also relied on rulings of the Special Bench of the Tribunal. However, the Tribunal ultimately based its decision on the Supreme Court's judgment in a case involving carbon paper, which established that certain treatments of paper fall under Tariff Item 17(2) and are subject to duty. The Tribunal concluded that laminating duty paid kraft paper qualifies as 'manufacture' and is liable to Central Excise duty under the specified tariff item.

In conclusion, the Tribunal held that polyethylene laminated kraft paper amounts to 'manufacture' and is excisable under the law. The decision was based on the Supreme Court's interpretation of Tariff Item 17(2) and set aside the previous order, allowing the appeal filed by the Collector of Central Excise, Guntur.