TaxTMI 
TaxTMI 
1985 (8) TMI 211
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....ed with a solution of carbon black or lamp black in a greasy/oily medium on a coating machine on one side or both sides, as required, by means of a coating roller and an equalising rod and then passing it through chilled rollers. 4. After holding adjudication proceedings, the Assistant Collector, Thane, Division I, by an order dated 18-9-80, held that the carbon paper manufactured by the appellants fell under Item No. 17(2),CET with the amendments brought about in item 17 by the Finance Act of 1976 and not under item 68 CET as contended by the appellants. The matter was pursued in appeal. The Appellate Collector, Bombay by his Order dated 17-3-82, confirmed the Assistant Collector's Order and dismissed the appeal. It is against this Order of the Appellate Collector that the appellants are presently before us. 5.  We have heard Shri Soli Sorabjee, Senior Counsel assisted by Shri S. Ganesh and Shri R.K. Habbu, Advocates for the appellants and Shri V. Lakshmikumaran, Senior Departmental Representative for the respondent. 6. The submissions made by Shri Soli Sorabjee, learned Counsel for the appellants, may be summarised thus:- (i) The 1976 budget changes did not....
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.... the present case, Item No. 17 was more specific to cover carbon paper. In fact there was no question of any competition between Items No.17 and 68. (ii) Item No. 17(2) might not be a definition: it was much more than that. The item covered paper which was subjected to treatment -it did not require that the treated paper should be known as paper in the trade. Even if Carbon paper was known in the trade as an article of stationery and not as paper, it would still fall under Item No. 17(2) (by virtue of the inclusive character of the item) since it was paper falling under Item No. 17 which was subjected to treatment. The question of considering item 68 would not, therefore, arise. The Tribunal's decision in [1984 (17) E.L.T. 590] was cited in this context. (iii) The Supreme Court's decision in the Kores (India) Ltd., case (supra) would not apply to the facts of the present case since the Central Excise tariff entry was not in paria materia with the entry in the Tax law. (iv) The Tribunal had considered the classification of carbon paper in the following cases :- (a)" Continental Carbon & Ribbon Mfg. Co. v. Collector of Central Excise, Calcutta - Order No. 456 &: 457/84-C,....
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..... "PAPER AND PAPER BOARD, ALL SORTS (including pasteboard, millboard, strawboard, cardboard and corrugated board), AND ARTICLES THEREFORE SPECIFIED BELOW, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power - (1) Uncoated and coated printing and writing paper (other than poster paper). (2) Paper board and all other kinds of paper (including paper or paper boards which have been subjected to various treatments such as coating, impregnating, corrugation, creeping and design printing), not elsewhere specified - (a)     X   X    X     X   X     X (b)     X   X    X     X   X     X (3) Carbon and other copying papers (including duplicator, stencils) and transfer papers, whether or not cut to size and whether or not put up in boxes. (4)     X   X    X     X   X     X 9. The base paper is admittedly a paper falling under item 17 wh....
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....erly described as a paper. The Court also observed that the mere fact that the word "paper" formed part of the denomination of a specialised article was not decisive of the question whether the article was paper as generally understood. The Court held that Carbon paper was not paper as envisaged in the sales tax notification. 11. Learned Counsel for the appellants has placed much reliance on the above decision. We have now to see whether the ratio of the decision has application to the case before us. In this context, it will be useful and relevant to note the observations of the Supreme Court in its recent judgment in Empire Industries Ltd. and Others v. Union of India and others - [1985(20)-E.L.T.179(SC)]. It may be noted that the taxable event in the context of Sales Tax Law is "sale". The taxable event under the Excise Law is 'manufacture'. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be as the result of one process or several processes "manufacture" takes place and liability to duty is attracted." The above passage occurs in para 30 at page 193 of the r....
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....the tariff contained an item to cover articles of stationery, one could plausibly argue that carbon paper is more appropriately classifiable under that item rather than under Item No. 17(2), CET. Can the same thing be said with reference to item 68 - "All other goods not elsewhere specified" - as an entry to be preferred to Item No. 17(2), CET which, in terms, covers coated paper which carbon paper is? 14. Now, on the point whether carbon paper is understood as a coated paper in trade, we have the authority of the Indian Standards Institution's publication "Glossary of Terms used in Paper Trade and Industry" - IS:4661: 1968. This Glossary as the book shows, was drawn up by a paper sectional committee consisting inter alia of representatives of All India Federation of Master Printers, Bombay, Stationery and Office Equipment Association of India, Calcutta, Indian Paper Mills Association, Calcutta, Calcutta Paper Traders' Association, Indian Paper Makers' Association, Calcutta etc. apart from technical and other authorities. As the foreword shows, the standard has been formulated with a view to eliminate ambiguity and confusion, arising from different interpretations of terms ....
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.... coated paper, fell under Item No. 17(2) CET. We do not see any reason to depart from this view. 16. It has been stated that the department's own understanding was that carbon paper did not fall under Item No. 17 but under item 68 as an article of stationery. Three trade notices have been cited in this connection. It is, however, important to note that all these trade notices are of dates prior to 17-3-1976, the date on which Item No. 17 was recast by the 1976 Finance Bill (which is the item under consideration now). The notices are hence not relevant for the present purpose nor are they decisive of the question as fairly stated by Shri Soli Sorabjee. 17.  The analogy of the Brussels Tariff Nomenclature (C.C.C.N.) is, in our view, of no help in resolving the dispute before us. The C.C.C.N. has a specific entry - 48.13 - which covers inter alia carbon paper. The question of considering carbon paper for inclusion in 48.07 as a coated paper, therefore, does not arise. Nor is the reference to I.S. specifications for Carbon paper of any help. These specifications are quality specifications and have nothing to do with the question whether carbon paper is a coated paper. A....