Tariff classification of coated paper as converted paper upheld, with exemption allowed for duty-paid base paper products.

Coated paper subjected to further coating in the factory was commercially treated as converted paper and classifiable under Tariff Item 17(2), not as uncoated or coated printing and writing paper under Tariff Item 17(1). The Tribunal held that trade parlance and the actual material on record controlled classification, while standard specifications and cited precedents did not govern the facts. As the goods were made from duty-paid base paper, they also satisfied Notification No. 63/82-C.E. and qualified for exemption as converted paper.

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Issues: Whether the respondent's coated paper products were classifiable under Tariff Item 17(1) as uncoated and coated printing and writing paper, or under Tariff Item 17(2) as converted paper, and whether they were entitled to exemption under Notification No. 63/82-C.E. dated 28-2-1982.

Analysis: The product received from the market was already coated base paper and was subjected to further coating at the respondent's factory. On the materials placed, the goods were treated as converted paper within the meaning of Tariff Item 17(2), and the Revenue's own notice had proceeded on the footing that the goods were not known in trade parlance as converted paper. That premise was displaced by the concession that the goods were converted paper. The Tribunal also held that the cited standard specifications and trade publications did not control tariff classification, and that the precedents relied on by the Revenue did not govern the present facts. On the evidence, the goods either did not attract duty again as Item 17(1) goods or, if manufacture was involved, moved into Item 17(2) and satisfied the notification for duty-free treatment as converted paper made from duty-paid base paper.

Conclusion: The goods were held classifiable under Tariff Item 17(2) and entitled to exemption under Notification No. 63/82-C.E. dated 28-2-1982; the Revenue's case failed.

Ratio Decidendi: Coated paper subjected to further processing which is commercially understood as converted paper falls under Tariff Item 17(2), and where it is produced from duty-paid base paper it qualifies for the exemption granted to converted paper under the relevant notification.

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