TMI Blog2002 (5) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... 96; that the products manufactured by them are invoices, statements, guest folios, restaurant bills, MICR Bank Cheques, etc. which are purchased only by the actual users such as Five Star Hotels, airlines, multi-national banks and multi-national companies. He explained the manufacturing process by mentioning that duty paid printing paper is purchased in reel form; these reels are put on slitters to obtain different width; slit paper remaining in reel form is put on the said two machines where printing is done in different colours on the first three towers; Paper then moves to fourth tower in the continuous form where, if required, the spot coating of ink is done at the respective selected spots on the printed paper; thereafter paper moves on to the punching part of the machine and then for perforation, to fan-folding portion of the machine; that in this continuous processing of the paper it is impossible to remove the paper in between. 3.1 The learned Advocate, further, submitted that the Adjudicating Order has demanded Central Excise duty and imposed penalty on the ground that self-copying paper classifiable under Heading 48.16 of the Schedule to the Central Excise Tariff Act em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifiable under sub-Heading 4901.90 attracting nil rate of duty;, that the Department is bound by its own Circulars issued by the Board as held by the Supreme Court in the case of Paper Products Ltd. v. CCE - 1999 (112) E.L.T. 765 (S.C.). He also contended that their coating on paper is 4.5 and 5 GSM whereas the self-copying paper sold in the market has a coating of 7 GSM as per the Technical Report of the Chartered Engineer; that the coating is only incidental whereas the printing is their primary process; that it has been held by the Supreme Court in CCE v. Adhunik Plastic Industries, 1998 (98) E.L.T. 365 (T) where the printing is primary to the use of the goods and contributes something more than incidental printing, classification has to be under Chapter 49,; that it has been held by the Supreme Court in U.O.I. v. Ahmedabad Manufacturing and Calico Printing Co. Ltd. - 1985 (21) E.L.T. 633 (S.C.) that classification of the manufactured products for the purpose of Excise duty is dependent upon the nature and character at its final stage of production after all integral, incidental or ancillary processes of manufacture have been completed; the character of goods at the intermediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the Department are not acceptable because these were not recorded under Section 14 of the Central Excise Act as there does not appear any signature of any Central Excise Officer; secondly their cross-examination was not allowed; that as per Dinesh Gupta, the printing only specifies the customer and such printed carbonless paper is marketable; that he does not say whether the same would be marketable as a self-copying paper or as computer stationery; that other person Shri Chandraveer Jain has mentioned that his firm does not deal in printed carbonless paper; however, he clarifies that after the printing of logo and name of the customer, the same is not saleable as carbonless paper. He also stated that the Adjudicating Authority could not substitute his own personal opinion as evidence for the opinion of technical experts/trade as has been done by him at internal page 7 of impugned Order when he gives his findings that the argument that the impugned carbonless paper as emerging in their factory is different from the carbonless paper available in the market hardly has any effect so far as classifiability and dutiability is concerned. He relies upon the decision in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y from plain paper, the emergence of the carbonless paper is conspicuous which is a separate commodity, different from the plain paper and its usage is different from the ordinary paper; that essential characteristics of carbon less paper is imparted by the process of coating. He emphasized that the argument of their process being a continuous process is of no avail to the appellants as the function of individual sub-unit can be made non-operative as per need of the job; that the manufacturing process adopted by the Appellants is the same as mentioned in letter dated 21-4-1997 of M/s. Mead Opas International Sales which goes to show that the impugned paper is a known commodity; that it is apparent from the statement of Shri Chandraveer Jain, partner of M/s. Vaishali Papers, Delhi that the carbonless paper in printed form can be sold or purchased but the number of the customer is restricted. He, further, submitted that the appellants also manufacture blank computer stationery which shows that only perforation, punching and fan-folding processes are done in the said case, that it can thus be concluded that if the printed carbonless paper is supplied to the appellants, it can be conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey, Managing Director, have deposed in their statements dated 14-3-97 and 10-12-97 respectively that process of perforation, punching and fan-folding is essential to convert the carbonless paper into stationery; that they never retracted their statements. He, further, contended that non-mentioning of words whether or not printed in Heading 48.16 is immaterial as the expression other than those of Heading No. 48.09 used in Heading 48.16 is a relative expression which means that the scope of Heading 48.16 is to be construed in relation to Heading 48.09; that if the carbon less paper does not satisfy the conditions set out in Heading 48.09 (roll form width exceeding 36 cm or if in rectangular or square sheet form, its one side should exceed 36 cm in unfolded state), it will fall under Heading 48.16 irrespective of the fact whether each carbonless paper is printed or not; that Board s Circular No. 11/91-CX. 4, dated 15-10-91 is in respect to computer stationery under Heading 48.20; that the Circular neither deals with continuous carbonless computer stationery paper nor with the carbonless stationery as it actually deals with either plain continuous computer stationery or that which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y them. The printing paper is then passed through coating unit for applying chemical to develop the character of self-copying paper. The backside of the paper is coated to obtain top copy and front coating is done on the sheet, which is to be used as bottom copy. The chemically coated copy is finally passed through the unit for perforation, punching and fan-folding. It is also not in dispute that all these operations are carried out in continuous process. The Department is demanding Central Excise duty at the intermediate stage when the paper is coated to make it carbon less self-copying paper. The Appellants on the other hand, claims that what they are manufacturing is computer stationery in a continuous process and the paper after coating is not a marketable commodity as without perforation, punching, and fan-folding, the product cannot be sold in the market. The Department wants to classify the product as the coated paper at the intermediate stage under Heading 48.16 of the Tariff which applies to carbon paper, self-copying paper and other copying or transfer papers. The learned Advocate for the Appellants had also shown at the time of hearing the samples of the impugned produc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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