Component part test denies paper reel core exemption where cores are treated as packing material, not part of paper.

Paper reel cores used on rewinding and cutting machines were held not to be component parts of paper for exemption under Notification No. 201/79. The expression "component part" was applied in its ordinary sense, requiring a constituent of the finished article, while paper manufacture was treated as complete when the paper emerged from the paper machine. Reeling and cutting were regarded as later marketing processes, and the reel core as packing material rather than part of the paper itself. The distinction from Section 4 valuation provisions was noted, and the double taxation argument was rejected because the levy concerned packing material used in relation to other excisable goods.

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Issues: Whether paper reel cores used on rewinding and cutting machines for making paper reels of required sizes are component parts of paper so as to qualify for exemption under Notification No. 201/79 as amended.

Analysis: The term "component part" was understood in its ordinary sense as something that contributes to the composition of the finished article. Paper manufacture was held to be complete when the paper emerged from the paper machine; reeling and cutting were subsequent processes undertaken only for convenience of marketing. The reel core was treated as packing material for the paper reels and not as a constituent of the paper itself. The reasoning also distinguished the valuation provisions under Section 4, where packing may be relevant to assessable value, from the manufacturing requirement in the notification. The contention based on double taxation was rejected because the question was not one of repeated levy on the same goods but of duty on packing material used in relation to other excisable goods.

Conclusion: Paper reel cores are not component parts of paper and the exemption under Notification No. 201/79 is not available; the view taken by the appellate authority was incorrect.

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