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TMI Blog1990 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing products :- (i) Bituminised Water-proof packing paper (ii) Polythene-lined kraft packing paper (iii) Waxed kraft packing paper (iv) Jute-lined bituminised water-proof packing paper (v) Waxed kraft packing paper (vi) Hessian-lined kraft paper The company purchases kraft paper from the open market as well as other materials like bitumine, polythene, jute fibre and wax and thereafter combines these materials with kraft paper in its factory. Till October 30, 1980 the company classified its products under Item 17(2) of the Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) and paid duty accordingly. On October 30, 1980 the company discovered that none o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside the order of the Assistant Collector and directed that the department should refund the Excise duty levied and recovered from the respondent. The Union of India filed an appeal before the Division Bench of the High Court. The Division Bench while admitting the appeal, directed the respondents to file an affidavit setting out the process and accordingly affidavit was filed on July 18, 1986. The High Court after the perusal of the affidavit observed as under :- "The perusal of the affidavit arrived indicates that for manufacturing Bituminised Waterproof packing paper, kraft paper is mounted on a roller and then it is passed over a tank containing liquid bitumen. As the first roll of kraft paper crosses the bitumen tank roller with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of paper and it is not in dispute that the respondents do not manufacture any paper but purchase kraft paper from the open market. The process carried out by the respondents as such kraft paper does not amount to manufacture, and, therefore, Item 17(2) is not attracted to the work undertaken by the respondents". Learned Division Bench thus affirmed the judgment of learned Single Judge and dismissed the appeal. 4. We have heard Mr. Krishnamurthy Iyer on behalf of the Union of India and Mr. U.R. Lalit on behalf of the respondent. Mr. Krishnamurthy Iyer submitted that the case is fully covered by a recent decision of this Court in Laminated Packings (P) Ltd. v. Collector of Central Excise, Guntur - 1990 (49) E.L.T. 326 (S.C.) = 1990 (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under law or not. Dealing with the above question it was observed as under :- "Lamination, indisputably by the well settled principles of excise law, amounts to `manufacture'. This question, in our opinion, is settled by the decisions of this Court. Reference may be made to the decision of this Court in Empire Industries Ltd. v. Union of India. Reference may also be made to the decision of this Court in CCE v. Krishna Carbon Paper Co. We are, therefore, of the opinion that by process of lamination of kraft paper with polyethylene different goods come into being. Laminated kraft paper is distinct, separate and different goods known in the market as such from the kraft paper. Counsel for the appellant sought to contend that the kraft paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come into being. Laminated kraft paper is distinct, separate and different goods known in the market as such from the kraft paper. 9. We are in agreement with the above view. The entire case before the Assistant Collector was understood and argued on the basis of controversy regarding manufacture. Once it is held that the products which come into being are manufactured from kraft paper, then in the facts and circumstances of this case there can be no controversy that new goods come into being and they are sold in the market as distinct, separate and different goods. 10. In the result we allow this appeal, set aside the order of the High Court and uphold the order of the Assistant Collector. In the facts and circumstances of the case the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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