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TMI Blog1990 (1) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... uty-paid Kraft paper in reels and gave it a coating of Glue Gum on one side only and dried it on drying machine and thereafter rolled it in the form of reels. The resultant was gummed paper which was slit into different widths ranging from 1/2" to 25" size and packed in reels. The Collector (Appeals) has upheld the decision of the Assistant Collector. 2. We have heard Shri H.P. Arora, Advocate for the appellants and Shri A.S. Sunder Rajan, JDR for the respondent. Shri Arora has argued that the appellants manufacture gummed paper which is exempt from central excise duty by virtue of notification issued under Rule 8(1) of the Central Excise Rules. No duty is charged on the gummed paper in rolls. According to the central excise authorities, after gummed paper is slit in the form of tapes, it attracts duty under Central Excise Tariff Item 60. The learned advocate have argued that slitting of gummed paper does not amount to manufacture. Slitted gummed paper tapes continue to remain gummed paper and as such, no duty can be charged on the tapes. He has argued that Supreme Court, in its judgment reported in 1980 (6) E.L.T. - 343 (S.C.) in the case of Deputy Commissioner, Sales Tax (Law), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emoval within the factory of production for use in further manufacture of goods so long as such intermediate products are excisable goods within the meaning of the Act. In this decision, the Tribunal followed the ratio of the decision of Delhi High Court reported in 1980 (6) E.L.T.-735 (Del.) in the case of Hyderabad Asbestos and Cement Products Limited and Another v. Union of India and Others, in which it was held that if Parliament had specifically included a particular product in the Central Excise Tariff Schedule its validity could not be questioned on the ground that the process resulting in the production of the product does not amount to manufacture. Shri Sunder Rajan has also relied on the judgment of Bombay High Court in the case of Kores (India) Limited v. Union of India and Others, reported in 1982 (10) E.L.T. 253 (Bom.), in which it has been held that if the Parliament has specifically included a particular product in the Schedule to Central Excise Tariff, its validity cannot be questioned on the ground that such product did not involve manufacture. It is further held in that case that the process of cutting large rolls of paper into specific sizes and dimensions and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addressed to the appellants, the Assistant Collector of Central Excise, Saharanpur has stated that the gummed paper tape of the appellants has coating of adhesive which is activated by application of solvent, for example, water. In the said letter, he has also, observed that this tape is used for the purpose of holding materials together and therefore is classifiable under Tariff Item 60 and not under Tariff Item 17(2). Gummed paper obtained by gum being applied to one side of paper and falling under sub-item (2) of Item 17 of the Central Excise Tariff was exempted from the whole of central excise duty if appropriate central excise duty had already been paid in respect of the paper used in their manufacture, vide Notification No. 68/76-CE dated 16-3-1976, as amended. Since the appellants gummed paper was manufactured out of duty-paid kraft paper, it was fully exempted from duty by virtue of the above notification. According to the manufacturing process described by the appellants before the Appellate Collector, the impugned gummed paper tapes were obtained by slitting the gummed paper manufactured by them. In the case of Collector of Central Excise, Bombay II v. M/s. Kiran Spinnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovt. also has stated that such paper falls under Tariff Item 17(2). Following the ratio of the judgment of Supreme Court, reported in 1988 (16) ECR 115 (S.C.), we have already held that slitting of gummed paper into tapes does not involve manufacture and since Tariff Item 60 refers to the process of manufacture, the judgments of Delhi High Court, reported in 1980 (6) E.L.T. 735 (Del.) and Bombay High Court, reported in 1982 (10) E.L.T. 253 (Bom.) are of no help in favour of classifying the appellants gummed paper tapes under Tariff Item 60. 6. In view of the foregoing discussions, we classify these tapes under Item 17(2) of the erstwhile CET, set aside the impugned order and allow the appeal with consequential relief. [Assent per: G. Sankaran, Sr. Vice President]. -I have carefully read the order prepared by brother D.C. Mondal. I agree with his conclusion that the gummed paper tapes in question are appropriately classifiable under Item No. 17(2) of the erstwhile Central Excise Tariff Schedule ( CET ) and that the appeal should be allowed with consequential relief. I would, however, like to add a few words. 8. The proposition canvassed by the Revenue that once an article is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewhere specified. It may be noted that Item No. 17, on the other hand, covers paper and paperboard, all sorts. If therefore, treated paper, which is what gummed paper is, falls under Item No. 17(2) (and there is no dispute about this), there is no reason to hold that tapes slit out of such paper would cease to be under the said item. The situation may have been different if Item No. 60 read adhesive tapes, all sorts . As it is, it is a not elsewhere specified , that is, a residuary item. If, on a proper construction of Item No. 17, gummed paper tape is held to fall under that Item, it would stand excluded from Item 60. 9. A clue, though perhaps not a clinching one, which would support the above view is to be found in the words used in Item 60. It includes inter alia, paper backed adhesive tapes . This expression, in its natural sense, would refer to adhesive tapes of some material which have a backing of paper. This would, in turn, imply that gummed paper tape may not fall within the ambit of the item. 10. There is no doubt that converted types of paper fall under Item No. 17. In this Tribunal s Order Nos. 529 and 530/89-C dated 20-9-1989 in M/s. Purolator India Ltd. v. Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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