Excise duty on cigarette packet components: gummed shells escaped fresh levy, while commercially distinct slides remained dutiable.

Mere gumming of cigarette shells did not create a new and distinct excisable product, so no fresh duty under Item 68 was payable where duty had already been paid on the shells; relief was granted on that point. By contrast, slides used in manufacturing empty cigarette packets were commercially distinct articles that had not suffered duty and were separately dutiable under Item 68; the levy on slides was upheld.

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Issues: (i) Whether shells, after being gummed for making cigarette packets, became a new and distinct excisable product liable to duty under Item 68 of the Central Excise Tariff. (ii) Whether slides used in the manufacture of empty cigarette packets were separately dutiable under Item 68.

Issue (i): Whether shells, after being gummed for making cigarette packets, became a new and distinct excisable product liable to duty under Item 68 of the Central Excise Tariff.

Analysis: Duty had already been paid on the shells under Item 68 before the process of gumming. The process of gumming did not bring into existence a new and distinct product, and the shells continued to remain the same commercial commodity after the process.

Conclusion: The shells were not liable to further duty after gumming, and the review proceedings on this point were dropped in favour of the assessee.

Issue (ii): Whether slides used in the manufacture of empty cigarette packets were separately dutiable under Item 68.

Analysis: The slides had not suffered duty under Item 68. They were commercially known distinct products in the cigarette industry and stood on the same footing as shells in the manufacturing process. Their separate manufacture or procurement justified levy of duty under Item 68.

Conclusion: The slides were held dutiable under Item 68, and the revision application on this issue was rejected against the assessee.

Final Conclusion: Relief was granted in respect of shells, but the levy on slides was upheld.

Ratio Decidendi: Mere gumming that does not bring into existence a new and distinct product does not attract a fresh excise levy, but a commercially distinct article used in manufacture remains separately dutiable where it has not already suffered duty.

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