Supreme Court of India
Union Of India And Anr vs Babubhai Nylchand Mehta on 18 December, 1990
Equivalent citations: 1991 AIR 407, 1990 SCR SUPL. (3) 559, AIR 1991 SUPREME COURT 407, 1991 AIR SCW 46, (1990) 4 JT 790 (SC), 1990 (4) JT 790, 1991 (1) UJ (SC) 488, 1991 UJ(SC) 1 488, 1991 CRILR(SC MAH GUJ) 330, 1991 (2) SCC(SUPP) 348, (1991) 51 ELT 182, (1991) 31 ECC 455, (1991) 33 ECR 7
Author: N.M. Kasliwal
Bench: N.M. Kasliwal, S.C. Agrawal
PETITIONER:
UNION OF INDIA AND ANR.
Vs.
RESPONDENT:
BABUBHAI NYLCHAND MEHTA
DATE OF JUDGMENT18/12/1990
BENCH:
KASLIWAL, N.M. (J)
BENCH:
KASLIWAL, N.M. (J)
AGRAWAL, S.C. (J)
CITATION:
1991 AIR 407 1990 SCR Supl. (3) 559
1991 SCC Supl. (2) 348 JT 1990 (4) 790
1990 SCALE (2)1269
ACT:
Central Excises & Salt Act, 1944: Section 2(f) and
Schedule Item 17(2)--Processed Kraft Paper-- Assessability
to duty.
HEADNOTE:
The respondent is the proprietor of a company which
carried on business of manufacturing Waterproof Kraft Paper.
The company purchased kraft paper as well as other material
from the open market and combined these materials with kraft
paper in its factory. The company claimed that as the manu-
facturing process was not carried out in bringing into
existence various kinds of kraft papers, it was not liable
to pay any excise duty in respect of the products produced
in its factory.
The Assistant Collector of Central Excise held that the
kraft paper marketed by the company was bituminised water
proof packing papers which were different and distinct
products than the original kraft paper and hence were liable
to payment of excise duty.
The company filed a writ petition in the High Court.
The 1earned Single Judge held that the process carried on by
the company could not be considered as manufacture of a new
commodity with a different name and different use. On ap-
peal, the Division Bench affirmed the judgment of the
learned Single Judge.
Before this Court it was contended on behalf of the
Revenue that the case was covered by the recent decision of
this Court in laminated Packings (P) Ltd. v. Collector of
Central Excise, Guntur, [1990] Vol. 4 SCC 51 in which, in
similar circumstances, it was held that by the process of
lamination of Kraft paper with polyethylene, different goods
came into being-
The learned counsel on behalf of the company tried to
distinguish the Laminated Packings case. in the alternative,
it was urged that no evidence was placed on record by the
appellant to show that the goods in
560
question were known in the market having distinct, separate
and identifiable function.
Allowing the appeal, this Court,
HELD: (1) The coating and lamination and other process
applied the company in its factory amounted to manufacture,
because kraft paper did not remain an ordinary kraft paper,
and as such it was liable to excise duty under Central
Excise Tariff Item No. 17(2). [564G]
Laminated Packings (P) Ltd. v. Collector of Central
Excise, Guntur, [1990] Vol. 4 SCC 51, followed.
Standard Packaging Nailore v. Union of India, [1984] ECR
2639, referred to.
(2) In the facts and circumstances of this case there
could be no controversy that new goods came into being, and
laminated papers were sold in the market as distinct, sepa-
rate and different goods. [565B]
JUDGMENT: