1991 (7) TMI 80

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....uminium foils are backed with plain or printed paper for the purposes of making the same suitable and serviceable for packing the products. Gum is applied to one side of the foil by passing it over a roller dipped in adhesive and the foil with adhesive applied to one side is combined with plain or printed paper resulting in paper backed aluminium foil. 2. Tariff Item No. 27 of the First Schedule to the Central Excises and Salt Act, 1944 provides for levy of excise duty on aluminium and Entry 27(c) reads as under : Item No. Tariff Description Rate of duty (1) (2) (3) 27. Aluminium-     - - - - - - (a) - - - - - - - (b) -     (c) foil....

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....oils and the Company informed in detail the process of backing the aluminium foil. The Company filed the classification list on April 11, 1983 claiming that the process of backing does not amount to manufacture and the Company is not liable to pay excise duty under Tariff Item No. 27(c) on duty paid aluminium foils. The Company then filed the present petition on September 9, 1983 restraining the respondents from levying or collecting duty on paper backed aluminium foils and for refund of Rs. 1,12,31,558.94 in respect of period between February 1980 and August 31, 1983. It is required to be stated that from March 1, 1986, the Central Excise Tariff Act came into force and aluminium was covered by Chapter 76. Chapter 76 was amended from March....

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....n this basis, the Supreme Court held that once the polyethylene laminated or coated kraft paper from duty paid kraft paper is brought into existence by process of manufacture, then the fact that the duty has been paid on the kraft paper is irrelevant. We are unable to appreciate how the decision of the Supreme Court supports the claim of the Department in the present case. The decision of the Supreme Court proceeds on the basis that process of polyethylene lamination amounts to manufacture. In the present case, it cannot be even suggested that the process of backing aluminium foil with plain or printed paper amounts to manufacture. We have set out hereinabove the process adopted by the Company for backing of paper to the duty paid foils an....