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of <h1>Wrapping paper qualifies as essential component part, eligible for duty exemption under excise law.</h1> <h3>COLLECTOR OF C. EX. Versus EASTEND PAPER INDUSTRIES LTD.</h3> COLLECTOR OF C. EX. Versus EASTEND PAPER INDUSTRIES LTD. - 1989 (43) E.L.T. 201 (SC), [1990] 77 STC 203 (SC), [1990] 186 ITR 105, 1989 (4) SCC 244, 1989 ... Issues:1. Violation of Central Excise Rules regarding removal of wrapping paper without payment of duty.2. Interpretation of Rule 9(1), Rule 173 F, and Rule 173 G of the Central Excise Rules.3. Determination of whether wrapping paper qualifies as a component part or raw material for finished products.4. Application of excise duty on goods and the concept of manufacture in excise law.5. Consideration of processes incidental or ancillary to wrapping in the manufacturing process.6. Benefit of proforma credit under relevant notifications for exempting excise duty on specific goods.Analysis:1. The case involved appeals by the revenue under Section 35-L of the Central Excises and Salt Act, 1944, regarding the removal of wrapping paper without paying Central Excise duty, leading to a dispute between the appellants and respondents.2. The dispute centered around the violation of Rule 9(1), Rule 173 F, and Rule 173 G of the Central Excise Rules, with the respondents claiming exemption based on the captive consumption of wrapping paper as a component part of finished goods under the same Tariff Item.3. The Collector (Appeals) and Tribunal deliberated on whether wrapping paper, when used for making paper reams/reals, loses its identity and becomes a component part of the finished product, thus determining its eligibility for duty exemption.4. The judgment emphasized the concept of 'manufacture' in excise law, highlighting that excise duty is levied on goods that are new, distinct, and marketable, with the completion of manufacture including processes incidental or ancillary to wrapping.5. Referring to relevant case laws, the Tribunal upheld the manufacturer's contentions that wrapping paper qualifies as a raw material or component part of the end product, essential for making goods marketable and thus integral to the manufacturing process.6. The judgment also discussed the application of proforma credit under exemption notifications, drawing parallels with cases where components like nameplates were considered essential for making goods marketable, thereby qualifying for duty exemption.This detailed analysis of the judgment provides insights into the legal issues surrounding the violation of Central Excise Rules, the interpretation of relevant provisions, and the determination of wrapping paper's status as a component part in the manufacturing process, ultimately leading to the dismissal of the appeals based on the Tribunal's findings and established legal principles.
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