STANDARD PACKAGINGS Vs. UNION OF INDIA

JUDGEMENT

(1.) The partnership firm run under the name and style of The Standard Packagings (the firm) is the writ petitioner. The firm owns a licence (No. L4-2/77-79) to manufacture paper goods i.e. Bituminised water proof paper (bound paper), waxed paper (kraft paper) and Bituminised polythene paper. On bond paper in the State of Tamilnadu Excise duty levied under Excise Act 1 of 1944 (the Act) by notification of Ministry and Finance (department) No. 184/76-CE, dated 27/05/1976, has been "invalidated" by a judgment of 27/08/1980. The firm complains that as a result the bond paper is dumped in the State of Andhra Pradesh and because no duty is paid on paper manufactured in Tamilnadu the goods are sold at lower prices. The firm is apprehensive of loss of business due to lower cost price and it is represented they are likely to be elbowed out from the market. The firm lodged the writ petition in such exigencies and seeks the relevant notification to be quashed. Thus the question raised at issue is : Whether it is legal to levy duty on bond paper under the Act ? To be precise in formulating the question whether the bond paper is an item which falls under clause (2) of item 17 of Schedule of the Act. In support of the plea the firm has also raised the cognate question as to the plea of "double taxation" for the Madras High Court had invalidated the impugned notification on that ground.

(2.) The Revenue resists the prayer in the writ petition notwithstanding the decision on 27/08/1980 by the Madras High Court. The Revenue contends duty is leviable under clause (2) of item 17 under the Schedule of Section 3 of the Act. The levy is proper and legal. The levy does not suffer and vice whatever.

(3.) The first and foremost question to be decided having regard to the averments of the firm is : Whether bond paper is "manufactured" within the meaning of Section 3 of the Act 1 of 1944 ? The "process" adopted by the firm in producing bond paper is not in dispute. In the "process" two materials are used - asphalt and kraft paper. The former forms 20%. The latter forms 80%. These are the two components. As to the uses of bond paper it is used for packing goods mostly in transporting goods. The two bond paper and kraft paper are packing materials is not in dispute.