ITC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, PATNA

JUDGEMENT

(1.) THE undisputed factual position on record is as under : The appellants are engaged in the manufacture, inter alia, shells and slides falling under Chapter 48 of the schedule to the Central Excise Tariff Act, 1985. They had filed a declaration under the provision of Rule 57G describing the inputs as also the final products. The specified, inputs were paper, paperboard, ink, toluene etc. to be utilised in the manufacture of shells which are used by the appellants captively in their cigarette factories for packing of cigarette. During the process of the manufacture as above, some sheets of paperboards get mechanically misprinted/defective. After the inputs have been utilised on the machines for printing, the printed sheets are sorted out within the factory in order to separate the misprinted/defective sheets from the sheets which have been printed correctly. The waste sheets are also sorted out at the factory. The balance misprinted/defective sheets are thereafter despatched to the job worker, in the instant case, M/s. Importer India, Munger under the cover of prescribed challans issued under Rule 57F(4) of the said rules for further processions at the job workers premises. The sending of these sheets to the job worker was introduced pursuant to an application made by the appellant in March 1994 to the Assistant Collector of Central Excise, Bhagalpur.

(2.) AT the job workers end the misprinted/defective sheets go through the following two processes :

(3.) IN the case of (b) above the mis -printed sides of two such unusable sheets are pasted with glue. Thereafter these sheets are slit in accordance with required measurements. These glued sheets are thereafter returned back by the job worker to the said factory along with the sheets processed under (a) above together with the waste generated during the said processing. The glued sheets are thereafter creased and folded to take the shape of a tray. These trays are placed inside the CRCs to separate the shells in which they are packed from one row with the other. These folded interleaving have been given the nomenclature interleaving trays. They are used as separators of shells in the, packaging of the shells. The insertion of the interleaving trays amongst the shells packed in the CFCs prevents the shells from locking with each other. These interleaving trays were introduced in November, 1994 after receiving complaints that the shells were getting locked with each other during transportation.