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Issues:
Challenge to duty levied on wrapping paper used for packing other varieties of papers under Central Excise Rules, applicability of Rule 56A for proforma credit, dispute over the timing of duty imposition on wrapping paper, interpretation of Section 4(4)(d)(i) of Central Excises and Salt Act, 1944, retrospective application of Rule 56A, reliance on case laws for supporting arguments. Analysis: The petitioner challenged the duty imposed on wrapping paper used for packing other papers, contending that duty should only be levied when goods are cleared from the factory premises. The petitioner sought proforma credit under Rule 56A of the Central Excise Rules, claiming that the duty imposition at an earlier stage was contrary to the law. The petitioner argued that duty on wrapping paper for captive consumption should not be charged until goods are removed from the manufacturing premises. The Excise Authorities countered by stating that duty was imposed on wrapping paper used for packing other papers before they were used for wrapping. They highlighted that duty was levied on the value of the paper and the wrapper when packed paper was cleared, in accordance with Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944. The petitioner's counsel cited various decisions to support their claim for benefits under Rule 56A. They argued that there was no impediment to granting such benefits, referencing cases like Collector of Central Excise, Indore v. Orient Paper & Industries Ltd, Amlai, among others. On the other hand, the respondents' counsel contended that the petitioner's claim for retrospective application of Rule 56A was not valid, citing the case of Union of India v. Bombay Tyre. They emphasized that the petitioner's request for such benefits did not arise. The Court analyzed Rule 56A of the Central Excise Rules, which provides a special procedure for the movement of duty-paid materials for use in manufacturing excisable goods. It noted that the Collector could permit a manufacturer to receive materials on which excise duty had been paid for use in manufacturing, subject to prescribed conditions. The Court found that the steps taken by the respondents were not contrary to the law, as the wrapping papers were used internally and not removed from the factory premises. Consequently, the Court dismissed the writ petition, ruling in favor of the Excise Authorities and discharging the Rule without costs.
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