AI Drafter 
TaxTMI 
TaxTMI 
1993 (10) TMI 209
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....led before it. 2. The appellants are manufacturers of paper, an excisable commodity specified in Item 17 of the Central Excise Tariff Schedule (CET). During the material period, they used to manufacture wrapping paper as well as other sorts of paper. Duty used to be paid at the same rate both on the paper wrapped with the aid of wrapping paper as well as on the wrapping paper. The Departmental authorities appear to have considered that this practice was not correct and that since the wrapping paper and the wrapped paper fell under different sub-item of the tariff item, they should be assessed separately at the rates appropriate to them. On 10-2-1972, the Supdt. issued directions to this effect which the appellants started following.....
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....paper trade, as also enjoined by the Indian Standards Institution. No separate price is charged for the wrapper which is included in the price of the ream of paper, the contents. (ii) Duty was paid on the weight of the wrapper paper at the rate applicable to the contents paper. In the process, and depending on the difference between the duty rate on the wrapper paper and the contents paper, the short levies and excess levies on wrapper paper would have got cancelled. (iii) The appellants were not seeking exemption from duty altogether on the wrapper paper, as observed by the Asstt. Collector. (iv) Any revision in assessment practice which worked to the disadvantage of the ....
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....ieties of paper and that, therefore, the duty on the wrapping paper should have been levied and collected before its removal within the meaning of Rule 9; that the levy of and demand for duty on the said wrapping paper is not in consonance with Rule 9 and, therefore, the impugned demand was hit by limitation under Rule 10/Section 11-A of the Act. In short, the argument was that the impugned demand was not enforceable despite the retrospective amendment of Rule 9 and 49. 7. Appearing on behalf of the Respondent, Shri A.K. Jain, the learned Sr. Deptl. Representative submitted that packing and wrapping paper was classifiable under Item No. 17(3) CET. In fact, the classification list filed by the appellants themselves showed the clas....
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..... The paper wrapped with the aid of the said packing and wrapping paper was, of course, classifiable depending on its nature and description. The question is whether the packing and wrapping paper was liable to be charged the duty as such or only along with and at the same rate as the paper packed or wrapped. Section 3 of the Central Excises & Salt Act lays down that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods as, and at the rates, set forth in the First Schedule. We have already seen that packing and wrapping paper was specified in the said Schedule. 9. Rule 9 at the material time provided that no excisable goods shall be removed from the place of manufacture wheth....
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....fore such removal for such use and this not having been done, the purported levy and the demand raised for the differential duty at the point of removal of varieties of paper other than wrapping paper in fully manufactured condition is not in consonance with the requirements of Rules 9 and 49 amended and made retrospective. This contention again is not well founded. The amendments to Rules 9 and 49 have been given retrospective effect by Section 51 of the Finance Act, 1982 which inter alia provides that recovery shall be made all such duties of excise (i.e. duty leviable on excisable goods removed within the factory of production for consumption or utilisation in the manufacture of any other commodity) which have not been collected as if th....