1988 (10) TMI 205 - AT - Central Excise

Summary

Issues:
- Whether polyethylene laminated kraft paper amounts to 'manufacture' and is excisable under the law.
- Interpretation of previous rulings by different High Courts and the Tribunal regarding the excisability of laminated paper products.

Analysis:
The appeal was filed by the Collector of Central Excise, Guntur challenging the order of the Collector of Central Excise (Appeals), Madras. The main issue was whether polyethylene laminated kraft paper, made from duty-paid kraft paper, constitutes 'manufacture' and is excisable under the law. The Collector (Appeals) held that such laminated paper is not liable to duty again, citing a Division Bench ruling of the Andhra Pradesh High Court. The appellant contended that a Tribunal ruling in a similar case established that such laminated paper is indeed 'manufacture' and is liable to duty. The appellant also referred to a Bombay High Court decision, affirmed by the Supreme Court, supporting the view that such laminated paper attracts duty.

The respondent, represented by a Counsel, relied on the Andhra Pradesh High Court ruling and a Madras High Court decision to argue that bonding kraft paper with polyethylene does not change its essential character. The Counsel also cited rulings of the Special Bench of the Tribunal to support their position.

Upon considering the arguments, the Tribunal referred to the Supreme Court judgments in related cases. The Tribunal noted that the Supreme Court had previously held that processes involving the treatment of paper, such as lamination, constitute 'manufacture' for excise duty purposes. Citing the Supreme Court's interpretation of Tariff Item No. 17(2), which includes various paper treatments, the Tribunal concluded that laminating duty-paid kraft paper amounts to 'manufacture' and is subject to Central Excise duty under the said Tariff Item. Consequently, the Tribunal set aside the appealed order and allowed the appeal filed by the Collector of Central Excise, Guntur.