1985 (9) TMI 245 - AT - Central Excise

Summary

Issues:
1. Interpretation of duty exemption under Central Excise Notification No. 46/71 for corrugated boards.
2. Classification of corrugated boards manufactured with hessian laminated bitumenized paper.
3. Comparison between bitumenized water proof paper and bitumenized hessian laminated paper for duty exemption eligibility.

Analysis:
1. The appeal involved the interpretation of Central Excise Notification No. 46/71 concerning duty exemption for corrugated boards. The dispute arose regarding the duty leviable on 5 ply corrugated boards manufactured by the appellants, claiming exemption under the said notification. The department contended that the boards did not qualify for the exemption and were chargeable at 40% ad valorem under a different notification. The Collector of Central Excise confirmed the duty demand and imposed a penalty, which was later modified by the Board to 5% ad valorem. The key issue was whether the boards fell within the ambit of the duty exemption notification.

2. The classification of the corrugated boards manufactured by the appellants, specifically those with a fifth ply of hessian laminated with kraft paper using bitumen, was a crucial aspect of the case. The appellants argued that hessian laminated bitumenized paper should be considered as bitumenized paper, thus eligible for duty exemption under the relevant notification. They relied on Indian Standard Institution specifications and trade notices to support their claim. On the other hand, the departmental representative contested this classification, emphasizing the distinction between bitumenized water proof paper and bitumenized hessian laminated paper.

3. The comparison between bitumenized water proof paper and bitumenized hessian laminated paper was central to determining the eligibility for duty exemption. The appellants argued that the presence of hessian did not disqualify the product from being considered bitumenized paper, citing precedents and industry standards. The Tribunal referred to a similar case involving wax-coated paper to support the view that the presence of additional materials does not necessarily alter the classification. Ultimately, the Tribunal ruled in favor of the appellants, holding that the presence of hessian did not exclude the product from being termed bitumenized paper, thus entitling it to duty exemption under the notification.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's reasoning leading to the decision in favor of the appellants.