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Paper cutting not 'manufacture' under CETH 4802 90/99. No duty liability. Revenue appeal dismissed. The Tribunal held that cutting paper into smaller sizes does not amount to 'manufacture,' maintaining the classification of the product under CETH 4802 ...
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Paper cutting not 'manufacture' under CETH 4802 90/99. No duty liability. Revenue appeal dismissed.
The Tribunal held that cutting paper into smaller sizes does not amount to 'manufacture,' maintaining the classification of the product under CETH 4802 90/99 even after cutting. The appellant was found not liable for duty on this process, as it was determined that no new product emerged from the activity of cutting paper into desired sizes. The appeal by the Revenue was dismissed, and the cross-objection was disposed of accordingly.
Issues: 1. Whether cutting paper into desired sizes amounts to manufactureRs. 2. Whether the appellant is liable to duty for the activity of cutting paper into smaller sizesRs. 3. Classification of the product under CETH 4802 90/99 after cutting.
Analysis: 1. The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai, regarding the production of foolscap size writing paper by cutting, ruling, printing, and writing paper in running length into smaller sizes. The department contended that this activity constitutes manufacture and imposed duty along with a penalty. However, the lower appellate authority ruled that cutting paper into desired sizes does not amount to manufacture as the product remains paper, allowing the appeal.
2. The Revenue argued in the appeal memorandum that a new product emerges after cutting, justifying classification under 4802 90 and imposing duty on the appellant. The Additional Commissioner representing the Revenue reiterated these grounds. However, the Tribunal held that printing and writing paper itself is classified under CETH 4802 90/99, and cutting it into required sizes does not create a new product. Therefore, the Tribunal concluded that cutting and slitting of paper does not amount to 'manufacture,' dismissing the appeal and disposing of the cross-objection.
In conclusion, the Tribunal found that the activity of cutting paper into smaller sizes does not constitute manufacture, and the appellant is not liable to duty for this process. The classification of the product under CETH 4802 90/99 remains unchanged even after cutting, as no new product emerges from this activity.
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