Eligibility of exemption under Notification No. 163/67-C.E., dated 21-7-1967 Newsprint produced out of Chemi-mechanical Pulp - Central Excise - 38/89

Eligibility of exemption under Notification No. 163/67-C.E., dated 21-7-1967 Newsprint produced out of Chemi-mechanical Pulp. Circular No. 38/89 Dated 12-9-1990 [From F. No. 61/6/89-CX.4] Government of India Central Board of Excise Customs New Delhi Subject : Eligibility of exemption under Notification No. 163/67-C.E., dated 21-7-1967 Newsprint produced out of Chemi-mechanical Pulp. Reference Board's F. No. 61/20/88-CX.4, dated 16th September, 1988 addressed to Collectors of Central Excise, Belgaum and Cochin clarifying that benefit of Notification No. 163/67-C.E. is not available for chemi-mechanical pulp or semi-chemical wood pulp or any pulp other than mechanical pulp to say that the matter has been re-examined in consultation with Chief Chemist, Central Revenue Control Laboratory, in the Board's Office on representations from the trade. It has been represented that apart from the classical mechanical and chemical pulping processes, new processes of pulping have recently been developed. Some of these processes which utilise chemical treatment of raw materials, are regarded as variations of mechanical wood pulp. Accordingly, it is claimed that benefit of exemtpion Notification No. 163/67-C.E. can not be denied by treating pulp obtained by such processes as other than mechanical wood pulp particularly since on testing of samples the Chemical Examiner had certified that the paper contained more than 50% of mechanical wood pulp by fibre content. The processes claimed to be variations of mechanical pulping as per certificate dated 7th April, 1988 of the Central Pulp and Paper Research Institute are: - (a) Stone Ground Wood Process (SGW); (b) Pressurised Ground Wood Process (PGW); (c) Chemi Ground Wood Process (CGW); (d) Fine Ground Wood Process (FGW)); (e) Refiner Mechanical Pulping (RMP); (f) Chemi Refiner Mechanical Pulping (CRMP); (g) Semi Chemical Pulping (SCP); (h) Chemi Mechanical Pulping (CMP); (i) Thermo Mechanical Pulping (TMP); (j) Chemi Thermo Mechanical Pulping (CTMP). 2. The Board considered that the matter should be decided separately under the Old Tariff and in the New Tariff. As regards the position under the old stated by the Deputy Chief Chemist [Annexure-I (copy of opinion enclosed for information and guidance)] and the fact that the samples of paper were tested by Chemical Examiners who certified that the paper contained not less than 50% of mechanical wood pulp by fibre content, it was decided that chemi-mechanical pulping and chemi-thermo mechanical pulping are only variations of mechanical pulping and the pulp so obtained would be covered by the expression 'Mechanical wood Pulp' occuring in exemption Notification No. 163/67 dated 21-7-1967. Accordingly, for the period prior to 28-2-1986 wood pulp obtained by the chemi-mechanical and chemi-thermo mechanical pulping processes would be appropriately regarded as mechanical wood pulp and the benefit of exemption Notification No. 163/67 can not be denied by treating the pulp as other than mechanical wood pulp. 3. As regards the position under the new Tariff, it was viewed that since the Tariff specifically mentions mechanical wood pulp, chemical wood pulp and semi-chemical wood pulp, the expression mechanical wood pulp in Notification No. 163/67 should be interpreted in accordance with the Tariff. Therefore, after 28-2-1986 mechanical wood pulp in Notification No. 163/67 would refer to only such mechanical wood pulp as is covered under Heading 4701 HSN. Chemi-mechanical pulp and chemi-thermo mechanical pulp which are obtained by a combination of these two processes can appropriately be regarded as semi-chemical pulp and, therefore, are not covered by the expression mechanical wood pulp. Therefore, the benefit of exemption Notification No. 163/67 would be available on writing and printing paper intended for use in printing of newspapers, text books and other books of general interest when made from pulp containing less than 50% of mechanical wood pulp by fibre content but exceeding 50% aggregate of mechanical wood pulp and chemi-mechanical pulp and thermo mechanical wood pulp. 4. However, as regards recovery of duty short-levied due to irregular availment of exemption Notification No. 163/67 will be considered separately by the Board and further instructions will follow. 5. Field formations may be informed accordingly.