Kraft Paper classification and manufacture: waste paper products were held outside Chapter 48 and treated as manufactured goods.

Paper manufactured from waste and scrap was not classifiable as Kraft Paper under Chapter 48 because Kraft Paper requires at least 80% fibre content from chemical sulphate or soda processes, a condition not satisfied here. Waste paper derived from Kraft Paper does not retain that tariff character for classification purposes. The conversion of waste and scrap into a new commercially classifiable product constituted manufacture, so duty was attracted and the appeal failed.

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Issues: Whether paper manufactured from waste and scrap of paper could be treated as Kraft Paper under Chapter 48 of the Central Excise Tariff Act, 1985, and whether such activity amounted to manufacture attracting duty.

Analysis: Kraft Paper and Paper Board under Chapter 48 are defined as paper and paperboard of which not less than 80 per cent by weight of total fibre content consists of fibres obtained by the chemical sulphate or soda processes. The appellant admitted that this requirement was not satisfied, since the goods were not manufactured by the chemical sulphate or soda process. Waste paper, even if earlier derived from Kraft Paper, does not retain the character of Kraft Paper for tariff purposes. The conversion of waste and scrap into a new commercially classifiable product constituted manufacture.

Conclusion: The paper in question was not classifiable as Kraft Paper, and the activity amounted to manufacture. The appeal failed.

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