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TMI Blog1970 (7) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... bject to excise duty at either of the rates mentioned in entries No. 17/3 and 17/4. These entries are as under : 17(3) Printing Writing paper, other sorts. ...22 Naye Paise per Kgm. (4) Packing Wrapping paper, other sorts. ... 35 Naye Paise per Kgm. The contention of the petitioner is that the paper regarding which the differential duty is in dispute, is covered by entry No. 17(3) as these papers are printing writing papers and, therefore, the proper excise duty leviable on these papers, would be at the rate of 22 Naye Paise per Kilogram. As against this, the contention of the Excise Department is that these papers fall under entry No. 17(4) as they are 'packing wrapping' papers chargeable to duty at the rate of 35 Naye Paise per Kilogram. It is an admitted position that the papers in question are coloured papers, specimen of which are produced by the petitioner along with the petition. 3. It is obvious from what is stated above that the main dispute between the parties is under what entry the coloured papers manufactured by the petitioner, fall. It is not in dispute that up to the month of August, 1962, the Excise Department levied duty on these papers by applying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that charge was resulted in a short-levy because the proper entry under which the duty should have been recovered was entry No. 17(4) as the papers manufactured by the petitioner, were found to be "packing and wrapping" papers. The demand of the differential levy above referred to cover the period running from 30th August, 1961 to 27th July, 1962. 5. On 1st October, 1962, the petitioner addressed one letter to the Assistant Collector, Central Excise, Surat objecting to the above referred demand. A contention was also taken in that letter that the proper rule which applied to the facts of the case was rule No. 10 and not rule No. 10-A, and since rule No. 10 contemplated a period of limitation of three months, it was further contended that the demand in question was barred by time. A letter on the same lines was again addressed by the petitioner to the said Assistant Collector again on 19th October, 1962. 6. It appears that in the meanwhile, the reminent of the sample examined by the Deputy Chief Chemist, Bombay was sent to Chief Chemist, New Delhi for re-test on petitioner's request. After receiving the report of the Chief Chemist, New Delhi, the respondent No. 3 sent a gist o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pers but these two concerns preferred appeal before the Collector of Customs at Bombay. They were successful in their appeals before the said Collector because he, on consideration of the quality of the paper, came to the conclusion that they were not 'packing and wrapping' papers chargeable under item No. 17(4) but were 'printing and writing' papers liable to be charged under Entry No. 17(3). The Petitioner, therefore, requested the Collector of Customs, before whom this appeal was pending, to treat its case accordingly. The petitioner also produced plenty of correspondence from its customers and other merchants to whom the paper manufactured by it, was supplied, to show that these papers were actually used for printing purposes and were useless either for packing or for wrapping purposes. Moreover, the letters produced by the petitioner further showed the actual size in which the paper has been supplied by it to its customers. This size is known as "Demi" size, which is 17" x 22" in measurement. The petitioner further submitted to the Collector a statement showing the details of supply made by it to different merchants during the relevant period. It was on the strength of this ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or charge, after having been levied, has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge, so short-levied, or to whom such refund has been erroneously made, shall pay the deficiency or pay the amount paid to him in excess, as the case may be, on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owners account-current, if any, or from the date of making the refund." "10-A. Residuary powers for recovery of sums due to Government - Where these Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short-levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency on duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify." A bare perusal of these rules show that rule 10-A is a residuary rule which applies only in cases where rule 10 does not apply. Therefore, the first question to be considered is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Collector of Customs had the following evidence before them for coming to a correct conclusion on this point. This evidence can be described as under : (A) Three reports of the Chemists including the latest report, which was obtained on the samples drawn from petitioner's factory on 19th November, 1963 and a complete copy of which is found in our paper book. These three reports of the Chemist themselves show: (i) mechanical strength of the paper in question ; (ii) sizing material used during the manufacture of the paper; and (iii) penetration test. As will be evident from the discussion which follows these are the three main tests, which would bring about the distinction between a printing paper and packing or wrapping papers. (B) Correspondence produced by the petitioner between it and its customers showing the size in which the paper in question is supplied by the petitioner and the use to which this paper is put by the consumers. (C) The samples of the papers in question, and (D) Evidence as regards the distinguishing features of packing and wrapping papers. So far as this aspect is concerned, the petitioner is found to have pointed out to the authorities conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt from the letter itself which is in the following terms : "Please refer to your letter dated 23-1-1963. In continuation of this office letter of even No. dated 20-12-1962 and 25-1-1963, the gist of the test result received from Chief Chemist, New Delhi was communicated to you. Coloured printing paper (Pink) can be used for wrapping purposes and has been so classified as "Packing Wrapping Paper" falling under tariff item 17(4). You may therefore pay the Central Excise duty under item 17(4) i.e., 35 nps. per kg. If you feel aggrieved by this decision, you may appeal to the Collector of Central Excise, Post Box No. 118, Kevda Baug, Baroda within one month from the date of receipt of this order. The appeal should bear court fee stamp of Rs. 00.50 nps. and must be accompanied by this order or a copy of this order also bearing a court fee stamp of Rs. 00.50 nps. as prescribed under item 6(b) of Schedule 'I' of Court Fees Act, 1970". This letter completely shows that the volume of evidence which we have already discussed above, is not at all referred to by the Assistant Collector for coming to a conclusion that the paper is covered by item No. 17(4) of the First Schedule. Here it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der which the Collector has passed in Appeal against the above order. Whatever be the reasons for the Collector to delay his order for months, after the appeal was heard, we find that after this long deliberation over the merits of appeal, the only order which is recorded by the Collector is as under : "I have examined the facts and merits of the case. I have carefully considered all the pleas advanced by the appellants in the appeal petition as also the arguments at the time of personal hearing on 26-2-1964. I, however, see no reason to interfere with the decision taken by the Assistant Collector of Central Excise, Surat under his Order No. VI(a) 21-4-1962, dated 2-2-1963. I uphold the said order and consequently, the appeal is rejected." It is too obvious to mention that this order cannot be considered as a speaking order. It does not reveal what facts, the Collector had taken into consideration before coming to his conclusion. Under the circumstances, eveo this order suffers from the same infirmity as the order passed by the Assistant Collector, does. 14. It is thus evident that while disposing of the controversial points the excise authorities have come to their conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner is concerned, all three qualities are lacking and, therefore, these papers aren't fulfilling the requirements of a packing and wrapping paper. 22nd July, 1970 16. The next important fact which requires to be considered is the size in which the petitioner-firm is supplying the disputed paper to its customers. It is an admitted fact that these papers are being supplied by the petitioner in "Demi" size, which is 17-1/2" x 22". Obviously, the size is not useful either for "packing or wrapping purposes" 17. Neither the Act nor the Rules give any statutory showing what is, meant by `a writing paper and a wrapping paper'. Under the circumstances, the meaning, which could be attributed to these expressions would be that which people conversant with the subject-matter would attribute to them. Obviously, people conversant with those articles would be those, who deal with them in the market and those who consume them in their daily use. Therefore, the question is whether these papers are shown in the market by the businessmen and the consumers as 'packing and wrapping paper'. The correspondence which is produced by the petitioner gives answer to this question is the negative. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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