Post-use commercial character governs classification of imported paper, which was treated as waste paper after its primary use ended.

Paper imported as "Euro craft waste paper" was held taxable as waste paper rather than as ordinary paper because it had already been used for its primary intended printing function in the country of origin. The Kerala HC treated exhaustion of the original use as decisive: once the material became unfit for that same use, its post-use commercial character governed classification, even if it retained physical identity or could still be reused for packing. The item therefore fell under the waste paper entry and not the paper entry.

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Issues: Whether paper imported and sold as "Euro craft waste paper", after being used in the country of origin for its intended printing function, is taxable as waste paper under entry 102 of the First Schedule to the Kerala General Sales Tax Act, 1963 or as paper under entry 106 of that Schedule.

Analysis: The imported material was originally craft paper used to absorb excess ink in the printing of currency and was thereafter capable of being used for packing. The decisive question was when paper becomes waste paper. Once the paper has already been put to its primary intended use and is unfit for that same use again, it assumes the character of waste paper. The fact that it retains its physical identity or can still be reused for packing does not prevent it from being treated as waste paper. Entry 102 applies to waste paper used as packing material, whereas ordinary packing material by itself does not fall within that entry.

Conclusion: The item fell under entry 102 as waste paper and not under entry 106, and the revision was allowed in favour of the assessee.

Ratio Decidendi: A commodity that has been exhausted in its primary intended use and is thereafter fit only for secondary reuse is to be classified according to its post-use commercial character as waste paper, even if its physical identity remains unchanged.

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