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TMI Blog1985 (2) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondents were clearing such paper as pulp-board falling under sub-item (3) of Item No. 17-C.E.T. On 16-3-1976, Item No. 17 of the C.E.T. underwent certain legislative changes. From 16-3-1976 onwards the Respondents were clearing maplitho paper of the above grammage under sub-item (1) of Item No. 17-C.E.T. as printing and writing paper. It appears that the Central Excise authorities made certain trade enquiries which revealed that the said paper was being used as card, title cover and outer cover of text books, etc. The authorities, therefore, considered that the correct classification of the subject paper was under sub-item (2) of Item No. 17 and not sub-item (1). On this basis, the Supdt. of Central Excise, Bulsar issued on 12-4-1977 a notice to the Respondents asking them to show cause why a sum of ₹ 76,371.11 representing the short-levied duty should not be recovered from them in respect of the maplitho paper cleared by them during the period from 13-4-1976 to 31-1-1977 in terms of the provisions of Rule 10 read with Rule 173-J of the Central Excise Rules, 1944. In due course, the Assistant Collector of Central Excise, Surat passed an order dated 30-9-1977 holding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice had not been set out nor had the material gathered from the trade enquiries been revealed in the show cause notice. It was submitted that it would be in the interest of natural justice that full details pertaining to the said trade enquiries ought to be revealed to the Respondents so that they could have reasonable opportunity of dealing with them. The Central Government was called upon to disclose the full details and particulars of trade enquiries and any other relevant material on which the Department might be relying. It appears from the record that no reply was sent to the aforesaid letter. On 8-8-1980, the lawyers to the Respondents sent a detailed reply to the notice denying the allegations contained in it and reiterating that in view of the non-disclosure of the details of the trade enquiries referred to in the review notice, they were in no position to meet or deal with the same and, therefore, there was breach of the principles of natural justice. Thereafter, it appears that a hearing took place on 12-1-1981 before the Additional Secretary to the Government of India and this was followed by a statement of written submissions. However, the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the amended Item No. 17. (c) From the record of the personal hearing before the Assistant Collector (Page 7-A of the Respondents paper book 1) it would be clear that the practice followed by them prior to the 1976 Budget was to classify maplitho paper as pulp board and that they had all along consistently called maplitho as maplitho paper depending on the trade practice and not on the end-use practice. This would also be clear from the summary of arguments submitted before the Appellate Collector (Pages A18 and A19 of Paper Book 1). This description of the product coupled with its end-use as card, title cover, outer cover of text books, etc. was clear evidence of its not being a printing and writing paper. (d) The very words printing and writing paper signified that the paper should be predominantly for use in printing or writing. The aforesaid uses of the subject paper would show that it was not printing and writing paper. The Respondents had not produced any evidence in support of their contention that the subject paper was printing and writing paper. No doubt, certain affidavits were produced before the Appellate Collector (but not before the Assistant Collector) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abad in support of the contention that the subject maplitho paper was used in title covers, cards, etc.). Shri Hidayatullah objected to the production of these documents at this stage since they had not been disclosed to the Respondents at the earlier stages of the proceedings. However, dealing with the said documents, Shri Hidayatullah stated that the letter dated 22-3-1977 from M/s. Vinod Rai Co. to the Inspector of Central Excise, Surat stated that such paper was commonly used in the market as binding and also writing and printing paper. Similarly, the letter dated 22-3-1977 from Rati Lal Sons showed that the paper was used in title covers, cards and book printing. These documents also, therefore, went to support the Respondents contention. (b) On the other hand, the affidavits produced before the Appellate Collector were of greater probative value and could not be dismissed on the ground that they were of a stereotyped nature. Affidavits duly affirmed were evidence unless the averments therein were effectively rebutted. (c) Much was being made of the Respondents having classified the subject papers as pulp board prior to the 1976 Budget. During that period, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Another - 1980 E.L.T. 679. This was the view also taken by the Tribunal in Gujarat Machinery Manufacturer Ltd. v. Collector of Central Excise, Baroda - 1983 E.L.T. 1249. (vii) The Tariff Commission Report relied upon in the review show cause notice was not relevant. (viii) The Respondents case was fully supported by the Tribunal s decision in the Sirpur Mills case (Supra) and by the Government of India s decision in revision in Andhra Pradesh Paper Mills Ltd., Rajamundhri - 1982 E.L.T. 300. 8. In reply, Shri A.K. Jain, the Departmental Representative, besides reiterating some of the points urged by him in his opening address, stated that the DGTD s Circular relied upon by the Respondents had no reference or relevance to Central Excise Tariff item No. 17 nor did it follow that scheme. Some of the customers whose evidence had come on record had stated that, if the grammage exceeded 140, the paper ceased to be maplitho paper. What the Respondents wanted was to call the subject paper as pulp board when it suited them and now to call it as printing, and writing paper. The ISI Glossory did not contain a definition of printing and writing paper and was thus of no help. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p Paper Mills. These documents were apparently not disclosed to the Respondents despite their having, at the earliest opportunity, asked for disclosure of the material gathered during the trade enquiries and specifically reiterating this position in their reply to the review show cause notice and further making a grievance that their rights would be prejudicially affected by breach of the principles of natural justice if these documents were relied upon without disclosing them to the Respondents. Apart from this, as Shri Hidayatullah has pointed out, these very letters go to show that the subject Maplitho paper finds use as printing and writing paper besides in making cards, title covers, etc. 13. The Patna Collectorate s notice No. 7/CUS/75, dated 21-9-1975 is, as pointed out by the Departmental Representative, in the context of an export ban and, therefore, may not have any direct relevance to the dispute before us. Even so, it gives a clue to the Government s own understanding of the coverage of the expression writing and printing paper, all sorts . The notice shows that the Ministry of Commerce, Govt. of India, had clarified that the expression would, inter alia, include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Standards Institution defines Board as paper of a substance not below 180 GSM (generally above 250 GSM) characterised by its rigidity. Since, the case before us is not that the subject paper is a variety of board, we do not think, this evidence is of relevance to the present dispute. For the same reason, the draft International Standard ISO/DIS/4046 containing a vocabulary of Paper, Board, Pulp and Related Terms also is not relevant. We are not, therefore, referring to the decisions, cited on the subject of relevance of ISI Standards to interpretation of entries in the CET. 19. As against the aforesaid evidence adduced by the Respondents, the Department has not led any evidence in rebuttal apart from the two letters obtained in the course of trade equities to which we have already adverted. 20. It is a well settled principle that in a fiscal or taxing statute, the burden is heavily on the Department seeking to recover the revenue or tax. The burden of proving the necessary ingredients laid down by law to bring goods within a taxing entry is upon the taxing authority. (See 1981 E.L.T. 432 - Advani-Oerlikon Ltd. and Another v. Union of India and Others, and 1983 E. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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