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2016 (3) TMI 263 - AT - Central ExciseEligibility for exemption under Notification No. 50/2003-CE denied - area based exemption to the appellant/assessee was denied on the ground that the product they made in their unit is falling under Tariff Heading 4809.10 Carbon Paper of width exceeding 36 cms - Held that:- It is the appellant’s plea that they have added cutting machine during the course of expansion. This was admitted in the impugned order. The appellant/assessee cuts the Carbon Paper having width of 69 cms. to make Carbon Paper of less than 36 cms., packs them accordingly and clears the same. The Department has not brought forward any evidence to the effect that even after expansion the appellant/assessee is clearing only Carbon Papers of width exceeding 36 cms. The learned Commissioner (Appeals) in his impugned order dated 26/12/2006 recorded that at first Carbon Paper with normal width exceeding 36 cms. is manufactured by the unit and subsequently after printing and coating the same can be converted/sized to Carbon Paper of less width and length by dividing and cutting machine as per the requirement of the market. Having recorded so, the learned Commissioner (Appeals) proceed to conclude that cutting Carbon Paper of broader width to smaller size will amount to manufacture and hence duty has to be discharged on the larger Carbon Paper which is manufactured by the assessee, later further manufactured into smaller Carbon Paper by them. We find that the above finding of the Commissioner (Appeals) is misconceived and contrary to the decision of the Hon’ble Supreme Court in the case of CCE, New Delhi - I vs. S.R. Tissues Pvt. Ltd. reported in (2005 (8) TMI 111 - SUPREME COURT OF INDIA ). held that slitting and cutting of jumbo rolls of tissue papers or aluminium foils into various shapes and sizes will not amount to manufacture merely because the jumbo roll exceeding 36 cms. fell under one entry and the toilet paper of width not exceeding 36 cms. fell in a different entry. The impugned order itself mentions that after printing and coating the Carbon Paper of larger size is converted or sized into Carbon Paper of smaller size. There is no allegation or factual evidence in the proceedings before the lower Authorities for finding to the non-application of the Hon’ble Supreme Court’s decision in the case of CCE, New Delhi - I vs. S.R. Tissues Pvt. Ltd. (supra). We find the decision of the Hon’ble Supreme Court is applicable to the present case and as such we find the impugned orders unsustainable. The two main grounds namely absence of substantial expansion and manufacturing process in between, to deny the exemption to the appellant/ assessee cannot be upheld - Decided in favour of assessee
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