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TMI Blog1989 (8) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... ation). The Assistant Collector, Central Excise rejected the claim of the appellant but its claim on appeal as regards exemption from duty on paper cores was allowed by the Appellate Collector. Aggrieved by that order the Collector of Central Excise, Meerut, preferred the appeal in which the order which is the subject-matter of the present appeal, was passed. 2. The Notification on the basis of which exemption was claimed by the appellant inter alia provides: "the Central Government hereby exempts all excisable goods (hereinafter referred as "the said goods"), on which the duty of excise is leviable and in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) have been used, as raw materials or component parts (hereinafter referred as "the inputs"), from so much of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on the inputs." 3. As is apparent even from the order of the Tribunal the details of the use of paper cores in the manufacture of paper as set out by the appellant on the basis whereof the exemption was claimed by it read as hereunder :- "Paper cores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts" it is permissible to refer to the dictionary meaning of the word "component". According to the Webster Comprehensive Dictionary, International Edition the word "component" inter alia means a constitutent part. The term "manufacture", as already indicated above, according to its definition in the Act includes any process incidental or ancillary to the completion of manufactured product. In this context what has to be considered is whether in the manufacture of paper, paper core is used as a constitutent part and is necessary to be used in "any process incidental or ancillary to the completion of a manufactured product" - namely paper in the instant case. 4. In J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur andAnothers [(1965) 1 SCR Page 900] while dealing with the expression "in the manufacture of goods" used in Section 8(3)(b) of the Central Sales Tax Act, 1965 and Rule 13 framed under that Act it was held that the said expression "would normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper passes to cooling rolls, where the paper can be cooled by water spray if necessary and is then wound on to a real." Thereafter at page 234 it is stated :- "Paper, though made in the roll on the machine, is usually sold in the form of sheets. A number of reels of paper, on their spindles, mounted in a stack, are fed, as a pile of webs, between two rollers: a series of revolving knives slits them longitudinally as they emerge from between the rollers, in effect into strips which are cut again transversely by the scissors action of a movable upper knife, working periodically against a lower fixed knife. The cut sheets fall on to an endless felt for stacking." At the bottom of the same page it is stated :- "Paper is sold in sheets of different sizes and is made up into reams containing from 480 to 516 sheets in Great Britain, 500 in the United States; these sizes correspond to different trade names, as foolscap, demy, royal, etc." It is thus apparent that paper is made (1) in the form of rolls and (2) in the form of sheets and the paper which is sold in the form of sheets is cut in desired sizes by taking recourse to the process referred to above. 6. Chapter XIII of the Sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to independent cutters from the rewinders or the supercalenders, according to the finish the final paper is to have. The rolls are placed on reel stands which are constructed to hold up to twelve or more. Any one of these may be cut singly, or all may be cut together as desired. From the reels the paper passes through a cutter which has a knife on a revolving drum acting in a shearing manner against a fixed bed knife. Each time the drum revolves the knife cuts a sheet from the web of paper being fed continuously at constant speed, and the length of the sheet cut is regulated by altering the speed at which the revolving knife turns. Cutters are also designed to split the paper into the right width of roll, and to trim the edges, if this has not already been done at the rewinder. The paper leaves the cutter on travelling tapes and goes to a layboy which automatically jogs the sheets into uniform piles. These layboys take the place of operatives who formerly did the same work, and enable higher cutter speeds to be employed." 9. In the Dictionary of Paper (Fourth Edition, published under the Auspices and Direction of the American Paper Institute, Inc.) the purpose of rewinding is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as is meant to be cut in sheets out in that case it would at best provide more convenience to such manufacturer but for that reason paper core will not become a constitutent part of paper manufactured in sheets. 12. In view of the foregoing discussion, we are of the opinion that use of paper core is necessary for rewinding of paper if it is delivered to the customer in rolls and would come within the purview of the expression "any process incidental or ancillary to the completion of a manufactured product" used in the definition of the term "manufacture" in Section 2(f) of the Act and for the same reason paper core would also be constitutent part of paper and would thus fall within the term "component parts" used in the Notification insofar as manufacture of paper in rolls is concerned. Paper core, however, cannot be said to be used in the manufacture of paper in sheets as component part. We are conscious that the relevant tariff item uses the word "paper" but since paper in rolls and paper in sheets are nothing but different forms of paper, both of them would be excisable goods as paper under the relevant tariff item. 13. In the result, this appeal succeeds and is allowed to thi ..... 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