1993 (10) TMI 209 - AT - Central Excise

Summary

Issues:
1. Change in assessment practice regarding duty on wrapping paper.
2. Time-barred demand for duty.
3. Applicability of Central Excise Rules 9 and 49.
4. Classification of packing and wrapping paper under Item No. 17(3) CET.
5. Retrospective effect of Rule amendments on duty levy.

Analysis:

1. The appeal involved a dispute over the change in assessment practice regarding the duty on wrapping paper used by the appellants, who were manufacturers of paper. The Departmental authorities insisted on separate assessment of wrapping paper and the paper wrapped, leading to a demand for differential duty. The appellants argued that the change should be prospective and that the demand for the period prior to one year from the notice was time-barred under Rule 10 of the Central Excise Rules.

2. The Asstt. Collector rejected the appellants' contention on the change in assessment practice but accepted that the demand for a specific period was time-barred. However, a demand for a different period was confirmed. The Appellate Collector upheld most of the Asstt. Collector's order, modifying the enforceable period for the demand.

3. The appellants raised various points in their revision application, including the internationally recognized practice of including wrapper paper weight in the ream of paper, the payment of duty on wrapper paper at the rate of the contents paper, and the retrospective enforcement of any revision in assessment practice to the disadvantage of the assessee.

4. The Tribunal considered the classification of packing and wrapping paper under Item No. 17(3) CET. The appellants' classification list also indicated the same classification. The Tribunal emphasized that excise duty must comply with the provisions of the Excise law, regardless of international trade practices or standards set by organizations like the ISI.

5. The Tribunal analyzed the applicability of Central Excise Rules 9 and 49, particularly in light of retrospective amendments. It clarified that duty on wrapping paper should have been levied before its utilization in packing other paper varieties. The retrospective effect of the Rule amendments provided a legal basis for the demand raised by the Department.

6. Ultimately, the Tribunal rejected the appeal, stating that the demand for duty on wrapping paper was valid and enforceable. The Stay Order issued earlier was vacated as a result of the appeal dismissal.