Gujarat High Court
Swastic Products, Baroda vs Superintendent Of Central Excise on 1 January, 1800
Equivalent citations: 1989(20)ECC57, 1980(6)ELT164(GUJ)
ORDER S. Obul Reddi, C.J.
1. In this petition the petitioner swastik products quashing of the impugned notices at Annexures "B", "D" and 'U' issued impugned order of the respondents at Annexures. There is a further prayer for a writ of mandamus directing the respondents to forbear from enforcing and to desist from the enforcing the demand made in the aforesaid notice.
2. The facts giving rise to this petition briefly are these. The petitioner is a firm doing business of printing on paper. It purchases paper manufactured by manufacturers and colours or prints on one side of the paper. It is this colouring or printing on one side of the paper purchased by it from manufactures according to the respondents, that has entitled them to the demand payment of excise duty in accordance with the Tariff Item 17(4) of the First Schedule to the Central Excise Manual. Before the present action was taken against the petitioner, the Collector of Central Excise had held that the paper processed by is not liable o payment of any excise duty as it does not fall within Tariff Item No. 17(4) but the subsequently that view was not upheld by the excise authorities. The petitioner had once before moved this court for the same relief as prayed for new nd this court directed the excise authorities to afford the petitioner an opportunity of being heard and pursuant to that the Assistant Collector in the first instance heard the petitioner and held that the colouring or printing on one side amounts to 'manufacture' of paper is defined in section 2(f) of the Central Excises and Salt Act, 1944 and the in view held that Tariff Item 17(4) is attracted. The decision of the Assistant Collector which was carried in appeal by the petitioner was upheld by the Collector of Central Excise and the Revision Petition filed against the Collector's decision was also dismissed by the Central Government, It is after the decision of the Central Government that the impugned notices and the order were served upon the petitioner calling upon it to pay duty on the goods, namely, printed, paper as provided in Tariff Item 17(4).
3. Mr. Sanjanvala, learned counsel appearing for the petitioner invited our attention to Tariff Item 17 and also the definition of 'manufacture' to the contended that by no stretch of reasoning can, paper which is coloured by the petitioner to one side or printed on one side be said to be a process in the 'manufacture' of paper. 'Manufacture' as defined in section 2(f) includes any process incidental incidental or ancillary to the completion of a manufactured product; and
(i) in relation to tobacco, includes the preparation of cigarettes, cigars, cheroots, biris, cigarette or pipe or hookah tobacco, chewing tobacco or snuff; and
(ii) in relation to salt, includes collection, removal, preparation, steeping evaporation, boiling or any one or more of these processes the separation or purification of salt obtained in the manufacture of saltpeter, the separation of salt from earth or other substance so as to produce elementary salt, and the excavation or removal of natural saline deposits or efflorescence.
(iii) in relation to patent or proprietary medicines as defined Item No. 14E of the First Schedule and the relation to cosmetics and toilet preparation as defined in Item No. 14F of that the Schedule, includes the conversion of powder into tablets or capsules, the labelling or re-being of containers intended for consumers and re-packing from bulk packs to retails packs or the adoption of any other treatment to render the product marketable to the consumer.
(iv) in relation to goods comprised in Item No. 18A of the First Schedule includes sizing beaming warping, wrapping, winding or reeling or any one or more of these processes or the conversion of any form of the said goods into another form of such goods;
and the word 'manufacturer' shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account.
Tariff Item No. 17 of the extent relevant read-
`17. paper, all sorts (including paste board, millboard, starboard and cardboard) in or in relation to the manufacture of which any process is ordinarily carried on with the aid of the power :-
(1) Cigarette issue Rs. three per kg. (2) Blotting, toilet tissue other than Rs. one and twenty cigarette tissue, teleprinter paise per kg typewriting manifold bank bond art paper chrome paper tubsized paper, cheque paper stamp papers cartridge paper, waxed paper polyethylen & coated par, parchment and coated paper (including art board chrome board and for the playing cards). (3) Printing and writing paper, packing Sixty paise per kg. and wrapping paper and straw broad and pulpboard including grey board, corrugated board, duplex and triplex board, other sorts. (4) All other kinds of paper and paper Rupees one and twenty board not otherwise specified. paise per kg.
4. What Mr. Vakharia appearing for the respondents contends is that the colouring process of the paper purchased by the petitioner would come within the sweep of "all other kinds of paper and paper board, not otherwise sepcified'. The words 'all other kinds of paper' occurring in Tariff item 17(3) refers of 'all other kinds of paper manufactured. Colouring a paper nor can that process be said to be one incidental or ancillary to the manufacture of colouring was in the process of the 'manufacture' of the would come within the expression paper all sorts, No manufacturing process is involved by printing on the white paper or by colouring manufactured product namely, the paper. We are, therefore, unable to agree with Mr. Vakharia that 'all other kinds of paper' would take in paper which has already been manufactured and on which either printing is done or colouring is done. We, therefore hold that the respondents erred in invoking sub- item (4) of Tariff Item 17 in demanding the payment of excise duty. It is brought to our notice by the learned counsel for the petitioner that the goods in question had already suffered excise duty. duty payable on the goods sold tot he petitioner. This statement made by the learned counsel for the respondents. There is no separate item for payment of excise duty on flint paper. Therefore the petitioner is not liable for payment of excise duty on the flint paper.
5. We therefore quash and impugned notices and the impugned orders and allow this writ petitioner and make the Rule absolute with no order as to costs.