Waxed paper classification under excise law upheld, with concessional duty and manufacture test both satisfied.

Paper one side coated with sodium benzoate and the other side waxed was treated as waxed paper for excise classification because the tariff entry covered paper subjected to coating and the notification extended concessional duty to waxed paper under that entry. The product was described in invoices as wax paper, and there was no evidence that the market knew it only as coated paper. The notification did not distinguish between one-sided and two-sided waxing, and the treatment also rendered the paper commercially different in name, character and use, satisfying the test of manufacture for excise purposes. The assessee was therefore entitled to the concession and consequential relief.

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Issues: Whether paper one side coated with sodium benzoate and the other side waxed was classifiable as waxed paper entitled to the concessional rate under Notification No. 71/76, and whether the processing amounted to manufacture attracting a second-stage levy under Item 17(2).

Analysis: Item 17(2) of the tariff specifically included paper subjected to treatments such as coating and the notification granted concessional treatment to waxed paper falling under that item. The product was described in invoices as wax paper, and no evidence was produced to show that it was known in the market only as coated paper. The notification did not distinguish between paper waxed on one side or both sides, and the assessee had not taken the benefit of Rule 56A or Notification No. 67/76. The contemporaneous administrative understanding, reflected in the simultaneous amendment of the tariff entry and issue of the notification, supported the view that treated paper was intended to bear duty at the second stage. The product after treatment was commercially different from the base paper in name, character and use, so the process also answered the test of manufacture.

Conclusion: The product was waxed paper eligible for the concessional duty under Notification No. 71/76, and the appeal succeeded.

Final Conclusion: The assessee was entitled to the duty concession and consequential relief, and the departmental classification at the higher rate could not stand.

Ratio Decidendi: Where the tariff entry itself includes treated paper and the product is commercially identifiable as waxed paper, the assessee is entitled to the concession for waxed paper and the treatment may constitute manufacture for excise purposes even though the base paper remains within the same tariff heading.

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