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TMI Blog1983 (1) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... by M/s. Shree Rayalaseema Paper Mills Ltd., Kurnool, who are engaged in the manufacture of varieties of paper including wrapping paper. The facts of the case are not in dispute but for a proper appreciation of the legal issues which flow from such facts, the same are briefly set out as hereunder. 2. When the appellants started production in their paper mill in April, 1979, the Assistant Collector of Central Excise, Kurnool vide his order dated 21-4-1979 informed them that excise duty should be paid by them (a) on wrapping paper produced by them prior to its use as wrapper for wrapping other varieties of paper, and (b) the value of such wrapping paper (including the duty element) should be added to the value of any other type of paper b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is disposed of accordingly. No costs. 4. Shri L.M. Kaul who appeared for the appellants staled that :- (i) the goods, namely, the wrapping paper were not cleared from the factory and, therefore, could not be subjected to duty till they were cleared along with the other types of paper for which the said wrapping paper had been used; (ii) the Assistant Collector of Central Excise at Rajahmundry had been following a procedure under which the value of the wrapping paper produced in the factory and the value of the writing paper/printing paper etc. are separately declared for the purpose of duty and charged to Central Excise duty at the appropriate rates when the said writing/printing paper is cleared from the factory; (iii) subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e did not subscribe to the argument putforth by Shri Kaul that this amounted to paying the Central excise duty twice over. According to him v/hen the duty was paid for the first time, it was on wrapping paper. When the duty was charged on writing paper or other varieties of paper packed in such wrapping paper, the collection of duty was not on wrapping paper per se but on that particular variety of paper which was removed from the factory. In this context, Shri Mahesh Kumar relied on the decisions in Ahmedabad Mfg. Calico Printing Ltd., and others v. Union of India - 1982 E.L.T. 821 (Guj.) and in Geep Industrial Syndicate Limited v. Union of India and another - 1982 E.L.T. 857 (All.). According to him, following the ratio of these decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le purchasers are to be included in the manufacturing cost. In the instant case, however, it cannot strictly speaking, be said that the writing paper cannot be considered as not marketable unless it has been packed in wrapping paper. We also note that the wrapping paper and other varieties of paper are being manufactured in the same premises and basically the same machinery is used for manufacturing of such different varieties of paper. The finishing room is also the same i.e., the writing paper and the packing paper are put along side and the process of packing the former is completed there. It is difficult to go all the way with Shri Mahesh Kumar to accept his contention that the wrapping paper loses its identity completely when other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on the value of the wrapping paper in accordance with the tariff rate applicable thereto. As observed earlier, the facts of the present case are on all fours with the facts of the case of Andhra Pradesh Paper. Mills Ltd. Since the appellants factory and the Andhra Pradesh Paper Mills Ltd. fall within the jurisdiction of the same High Court, it is appropriate that the procedure being followed by the Andhra Pradesh Paper Mills Ltd., in pursuance of the decision of the Andhra Pradesh High Court in the Writ Petition No. 2055 of 1980 should also be allowed to be followed by the appellants. We, therefore, direct that the wrapping paper in question be charged to excise duty only once in accordance with the ruling given by the Hon ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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