1981 (5) TMI 30

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....are interleaved with duty paid tissue paper to ensure that the edges of the foils do not get stuck in the process of being cut to shape. Neither is the tissue paper used for the purpose of interleaving glued or pasted to the foils with any adhesive. 3. When the Excise authorities demanded payment of excise duty on the tissue paper used for interleaving the aluminium foils for tea chest linings, the company drew the attention of the said authorities to a Notification bearing No. 155/72, dated 15-6-72, issued by the Central Government in exercise of its powers conferred by Rule 8(1) of the Central Excise Rules whereby Central Excise duty on foils of the description 'merely cut to shape and embossed or perforated was exempted if the appropria....

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....ils to facilitate their cutting to shape and size and this process does not bring into existence any new manufactured product and both the articles namely, aluminium foil and tissue paper, retain their individual characters and as such, the attempt on the part of the Excise authorities to further tax the tissue paper, tantamounts to double taxation and is also illegal in view of the fact that no new product has come into existence. In this connection Mr. Chakravarti has referred to two decisions of the Supreme Court, namely, Union of India v. Tata Iron and Steel Company Ltd. Jamshedpur reported in AIR 1976 SC 599 = 1977 (1) E.L.T. (J 61) and Union of India v. Delhi Cloth and General Mills Co. Ltd. reported in AIR 1963 SC 791 = 1977 (1) E.L.....

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....racter and is transformed into a separate and distinct excisable commodity ? It is nobody's case that tissue paper is pasted to the aluminium foils by any adhesive. Even after cutting to shape the tissue paper retains its identity and individual character as tissue paper and the aluminium foil remains as aluminium foil. Therefore, the tissue paper does not undergo any manufacturing process whilst being used for the aforesaid purpose. Moreover, if excise duty is sought to be levied on the duty paid tissue paper after it is used for the purpose of interleaving with the aluminium foils, it will mean double taxation which is not permissible under the law and which the Supreme Court has also deprecated in the case of Union of India v. Tata Iron ....