SESHASAYEE PAPER AND BOARDS LIMITED ERODE Vs. APPELLATE COLLECTOR OF CUSTOMS AND CENTRAL EXCISE MADRAS

JUDGEMENT

(1.) THE facts leading to the writ petition are as under : THE petitioner company is engaged in the manufacture of paper/boards. As per the international trade practice, in the paper industry and as per the Indian Standards Specifications, the ream/reel weight of paper and paper-board sold is inclusive of the weight of the wrapping paper. In other words, the weight of ream/reel is the combined weight of the packed paper as well as the wrapping paper. This convention has been accepted by the Directorate General of Supplies and Disposals, Government of India, for supplies under Rate Contract also and the chargeable weight of the paper is always inclusive of the weight of the wrapping paper.

(2.) TILL May, 1972, the excise duty on wrapping paper and the paper packed in such wrapping paper was being collected at the rate applicable to the packed paper. The paper mills were also realising the duty on wrapper and packed paper on the this basis from their customers. However, with effect from 1-6-1972, the petitioner was called upon to pay duty on wrapping paper and wrapped paper separately at the rates of duty applicable to the them.

(3.) THIS practice was in vogue with effect from 8-9-1977, paying 'under protest' duty on wrapper at the time when it was taken by the Finishing House for packing reams/reels and again at the time the reams/reels were cleared from the bonded godown, on the total weight of the reams/reels, which included the weight of the wrapper paper on which duty had already been paid. The result of it was excise duty was paid on wrapper paper twice : (1) at the time it was taken by the Finishing House for use within the factory and (2) at the time of final clearance of the packed reams/reels for being supplied to the customers.