TaxTMI 
TaxTMI 
2005 (8) TMI 111
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....e facts in Civil Appeal Nos. 5293-5394 of 2001. 3.The assessee was engaged in the activity of cutting/slitting of jumbo rolls of tissue paper of a width exceeding 36 cms. The jumbo rolls were purchased on payment of excise duty from various suppliers like M/s. Ellora Paper Mills and M/s. Padamjee Paper Mills etc., who are the manufacturers of such jumbo rolls. The duty was paid under Tariff Heading 48.03 of Central Excise Tariff Act, 1985 (hereinafter referred to as "the Act, 1985"). The jumbo rolls purchased by the assessee were of a kind normally used for household or sanitary purposes. All that the assessee was doing was to reduce the width to less than 36 cms. On such reduction of the width, the department sought to assess and demand duty under tariff sub-heading 4818.90. 4.For the sake of convenience, we quote herein below Tariff Headings 48.03 and 48.18. Heading No. Sub-heading No. Description of Goods Rate of Duty 1 2 3 4 48.03 4803.00 Toilet or facial tissue stock, towel or napkin stock and similar paper of a kind used for household or sanitary purposes, cellulose wadding and webs of cellulose fibres, whether or not creped, crinkled, e....
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....pkins made by them. The assessee pointed out that there was no allegation in the show cause notice that wet tissues or tissues having fragrance were being made by the assessee. 7.By order dated 22-11-1999, the Commissioner adjudicated the above show cause notices and confirmed the demand. He also imposed a penalty. It was held that the assessee was the manufacturer of table napkins, toilet rolls and ordinary wet and fragranted facial tissues with distinct brands/trademark. Accordingly, the Commissioner confirmed the aforestated demand. 8.Aggrieved by the order dated 22-11-1999, the assessee filed an appeal before the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as "the Tribunal"). 9.By judgment and order dated 10-11-2000, the appeal preferred by the assessee was allowed. It was held that the assessee was purchasing duty-paid jumbo rolls of tissue paper, that, thereafter they used to cut/slit the tissue paper to various sizes suitable for use as toilet papers, table napkins or facial tissues and that this activity did not alter the name, character or end-use of the material and, therefore, the said activity/process did not amount t....
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....-use or commercial identity emerged and, therefore, there was no "manufacture" both in terms of first principles as well as in terms of Section 2(f) of the said Act. Accordingly, the appeals filed by the assessee stood allowed. Hence, these civil appeals. 10.Mr. Dutta, learned senior Counsel appearing on behalf of the department submitted that the activity of cutting/slitting of jumbo rolls of tissue paper into smaller sizes amounted to "manufacture" under Section 2(f) of the said Act. It was further submitted that the definition of the word "manufacture" in Section 2(f) was inclusive and, therefore, the normal meaning of the term could be ascertained for judicial interpretation. He submitted that on cutting/slitting of jumbo rolls, several different products emerged, namely, table napkins, toilet rolls, facial tissues etc. and, therefore, cutting/slitting constituted "manufacture" and, therefore, the department was right in raising the demand under sub-heading 4818.90. It was urged that in the present case, the test of character or end-use have to be applied and on applying the said test one finds that on cutting/slitting of the tissue paper from the jumbo rolls, a new product ....
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....te that the characteristics of the tissue paper are its texture, moisture absorption, feel etc. In other words, the characteristics of table napkins, facial tissues and toilet rolls in terms of texture, moisture absorption capacity, feel etc. are the same as the tissue paper in the jumbo rolls. The said jumbo rolls cannot be conveniently used for household or for sanitary purposes. Therefore, for the sake of convenience, the said jumbo rolls are required to be cut into various shapes and sizes so that it can be conveniently used as table napkins, facial tissues, toilet rolls etc. However, the end-use of the tissue paper in the jumbo rolls and the end-use of the toilet rolls, the table napkins and the facial tissues remains the same, namely, for household or sanitary use. The predominant test in such a case is whether the characteristics of the tissue paper in the jumbo roll enumerated above is different from the characteristics of the tissue paper in the form of table napkin, toilet roll and facial tissue. In the present case, the Tribunal was right in holding that the characteristics of the tissue paper in the jumbo roll are not different from the characteristics of the tissue pap....
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.... in 2004 (174) E.L.T. 145, this Court held that if a process is indicated in a tariff entry without specifying that the same amounts to manufacture then indication of such process is merely for identifying the product. For a deeming provision to come into play, it must be specifically stated that a particular process amounts to manufacture and in its absence, the commodity would not become excisable merely because a separate tariff item exists in respect of that commodity. In that matter, the question which arose for determination was - whether refining of edible vegetable oil, as a process, constituted "manufacture". It was held that the product even after refining continued to remain an edible vegetable oil. It was further held that neither in the section note nor in the chapter note, refining as a process was indicated as amounting to manufacture. In the circumstances, it was held that refining of edible vegetable oil did not amount to "manufacture". In our view, the ratio of the said judgment is squarely applicable to the facts of the present case. As stated above, the characteristics of the tissue paper in the jumbo roll are not different from the characteristics of the tissue....
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....n of a product in a tariff heading does not necessarily imply that the said product was obtained by the process of manufacturing. That, just because the raw material and the finished product came under two different headings, it cannot be presumed that the process of obtaining the finished product from such raw material automatically constituted manufacture. In the present case, merely because tissue paper in the jumbo roll of the size exceeding 36 cms. fell in one entry and the toilet roll of a width not exceeding 36 cms. fell in a different entry, it cannot be presumed that the process of slitting and cutting of jumbo rolls of toilet tissue paper into various shapes and sizes amounted to manufacture. 20.The above tests would also apply to cutting and slitting of jumbo rolls of aluminium foils (which item is the subject matter of some of the civil appeals herein). 21.Lastly, in the instant case, the Commissioner as an adjudicating authority has held that there was a value addition of 180%. He found that jumbo rolls of tissue papers were purchased by the assessee @ Rs. 30/- to Rs. 70/- per kg. and the final product i.e. the toilet tissue paper was sold by the assessee @ Rs. 8....