TMI Blog1983 (5) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... after referred to as the Schedule), or the residuary item 68 thereof. 2. The facts necessary to appreciate and determine the aforesaid questions are :- (a) the Appellant buys duty paid kraft paper; (b) the layers of such kraft paper are bonded with bitumen (duty paid) as the bonding agent or adhesive; (c) for the period between 1-9-1977 to 31-1-1978, the Appellant was paying Excise duty assessable under Item 17(2) of the Schedule; (d) an application for refund filed on 23-2-1978 was dismissed by the Deputy Collector on the ground that water proof bituminised kraft paper undergoes lamination process is covered under Tariff Item 17(2) , the bituminised draft paper is dutiable; (e) an appeal to the Appellant Collector ended in dismissal, inter alia, for the reasons that - 24(i) the product manufactured by the Appellant is commercially known as water proof paper; (ii) the plea that the identical product cannot be exigible to duty twice over under the same item of the Schedule is unsustainable in as much as, kraft paper is transformed and its value enhanced by bonding with the result that identity commercially must pay duty even if the same is classifiable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of paper, nor can the process be said to be one incidental or ancillary to the manufacture of paper; the Madras High Court observed in 1980 E.L.T. 579 that no manufacture of a new kind of paper is involved in the process of bituminisation of kraft paper to attract levy of duty under Item 17(2) of the Schedule; (b) the Andhra Pradesh High Court, on the contrary, in 1981 E.C.R. 113, held following the observations of the Supreme Court (no specific case cited, however) that - (i) when a change is brought about by treatment of labour and manipulation , resulting in finished goods different from the original and having a distinct name, character and use, a manufacture occurs; (ii) the plea of illegality of the levy twice over - first on kraft paper and then again on it being bituminised - is untenable as there is nothing in law including Art. 265 of the Constitution prohibiting it; (A.I.R. 1979 S.C. 321 - Avinder Singh vs. State of Punjab); (iii) it is not necessary for manufacture that the resulting finished goods should become assessable, by hopping, as it were, under an item other than that applicable to the original goods; (A.I.R. 1979 S.C. 321 sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) in the second place, Paper Board and all other kinds of paper were given an inclusive definition. The expression includes paper or paper boards subjected to various treatments. (iv) what are the various treatments? They are such as coating etc. (v) in other words, a residuary entry making use of an inclusive definition specifies various processes that are comprehended, pre-fixing the same with the expression such as . (vi) the question that arises is if the processes that are specifically mentioned are merely illustrative or exhaustive. (vii) if the list of processes is to be construed to be exhaustive, it does violence to the residuary character of the entry as well as the inclusive nature of the definition. The use of the expression such as is a well known legislative device merely to illustrate. The list of processes specified in Item 17(2) cannot therefore be treated as exhaustive or comprehensive; (viii) it cannot be said, therefore, that a process like bituminisation of kraft paper is not comprehended within the processes to which Paper Board could be subjected to in terms of Item 17(2) of the Schedule; (ix) some of the treatments specified can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey signify according to their natural import but also those things which the interpretation clause declares that they shell include [per Lord Watson in Dilworth vs. Commissioner of Stamps (1899) A.C. 99 at pp. 105, 106-and cited in p. 270 of Maxwell on Interpretation of Statutes-12th Edition]. Thus, when by Section 74(1) of the Shops Act, 1950, retail trade or business was defined to include the business of a barber or hair-dresser, Lord Somerville held in M F Frawley Ltd. vs. Ve-Ri-Best Co. Ltd. (1953) 1 Q.B. 318 at 323) that the words which follow `includes describe activities about which, at any rate there might have been disputes whether they came within the words `retail trade or business . The words, therefore, comprehended both what they naturally meant (primarily because of the words `retail , the supply of goods rather than services) and those activities specially mentioned in the definition section; (v) it is paper or paper board alone that is subjected to the levy. And Paper or Paper Board is not merely paper or paper board simpliciter but paper board subjected to various processes; (vi) once, therefore, kraft paper is manufactured, it attracts the levy un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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