BALLAPUR INDUSTRIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) These two appeals arise out of the decree dated 30th November, 1977 passed by the Civil Judge (Senior Division). Chandrapur, in Special Civil Suit No. 3 of 1975. First Appeal No. 11 of 1978 is filed by the original plaintiff, the Ballarpur Industries Limited, formerly known as "The Ballarpur Paper and Straw Board Mills Ltd." (hereinafter referred to as the 'plaintiff Company) and First Appeal No. 61 of 1978 is filed by the original defendant, the Union of India, in the Ministry of Finance, Department of Revenue and Insurance.

(2.) The plaintiff Company is engaged in the manufacture of various kinds of paper including various kind of board paper. The Company commenced production of paper for the first time in 1953 with one paper making machine called Machine No. 1. One more machine called Machine No. 2 was installed in the year 1963 and the total production of these machines was 18,000 tons of paper per annum. Two more machines styled as Machine Nos. 3 and 4 were installed on 23rd March 1964 and 29th August, 1965 respectively. In the year 1965, the plaintiff Company installed a machine called 'laminating machine' for manufacturing various types of Board paper, called Duplex Board, Triplex Board, Ace Cote Art Boards etc. which are processed from manufactured paper, This laminating machine which was commissioned on 12th June, 1965, was called 'Machine No. 5' till a 5th machine for production of paper was installed with effect from 11th February, 1972. Thereafter, the machine manufacturing board paper came to be called 'Laminating Machine.'

(3.) Section 3 of the Central Excise and Salt Act, 1944, (hereinafter referred to as the 'Act') authorizes the Central Government to levy and collect excise duty on all the excisable goods other than salt, which are produced by the manufacturers in India at the rates fixed in the First Schedule. The excise duty includes the basic duty and the special excise duty imposed by the Annual Finance Acts. Paper is Tariff Item No. 17 of the first schedule. Rule 8 of the Central Excise Rules, 1944, which are framed by the Central Government in exercise of the powers under Section 37, lays down that the Central Government may, from time to time, by notification in the Gazette, exempt any excisable goods from the whole or any part of the excise duty under such conditions as may be specified in the notification, which has been given statutory force by Section 38 of the Act.