Full Judgment Text
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PETITIONER:
LAMINATED PACKINGS (P) LTD.
Vs.
RESPONDENT:
COLLECTOR OF CENTRAL EXCISE, GUNTUR
DATE OF JUDGMENT06/08/1990
BENCH:
MUKHARJI, SABYASACHI (CJ)
BENCH:
MUKHARJI, SABYASACHI (CJ)
SAIKIA, K.N. (J)
CITATION:
1990 SCR (3) 630 1990 SCC (4) 51
JT 1990 (3) 493 1990 SCALE (2)272
ACT:
Central Excises and Salt Act, 1944: Section 2(F)--"Manu-
facture" --Lamination of duty paid kraft paper with polyeth-
ylene--Resultant product whether "manufactured" and dutia-
ble--Criteria--Market parlance --Goods with distinct, sepa-
rate and identifiable function--Coming into being.
Words and Phrases: "Manufacture"--Meaning of.
HEADNOTE:
To a question whether lamination of duty paid kraft
paper with polyethylene resulting in ’polyethylene laminated
paper’ would amount to ’manufacture’ and excisable under
Excise Law, the Collector of Central Excise (Appeals) an-
swered in the negative, and held that the appellant was
eligible to claim refund of duty paid by it. In reaching
this finding he followed the decision in Standard Packag-
ings, Nellore v. Union of India, [1984] ECR 2635 AP.
Against the said order, the Collector of Central Excise
preferred an appeal before the Customs, Central Excise and
Gold (Control) Appellate Tribunal. The Tribunal reversed the
order of the Collector (Appeals) and held that the appellant
was liable to duty.
Aggrieved, the appellant has preferred this appeal under
Section 35-L(b) of the Central Excises and Salt Act, 1944.
It was contended that duty was already paid on kraft paper
and there was no change in the essential characteristic or
the user of the paper after lamination, and that both the
goods belong to the same entry.
Dismissing the appeal,
HELD: 1.1. By process of lamination of kraft paper with
polyethylene different goods come into being. Laminated
kraft paper is distinct, separate and different from the
kraft paper. Lamination, indisputably by the well-settled
principles of excise law, amounts to manufacture. [632C-D]
631
1.2. ’Manufacture’ is bringing into being goods as known
in the excise laws, that is to say, known in the market
having distinct, separate and identifiable function. [632F]
1.3. Even if the goods belong to the same entry, the
goods are different identifiable goods, known as such in the
market. If that is so, manufacture occurs, and if manufac-
ture takes place, it is dutiable. [632F]
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Empire Industries Ltd. & Ors. v. Union of India & Ors.,
[1985] 3 SCC 314 and Collector of Central Excise, Kanpur v.
Krishna Carbon Paper Co., [1988] 37 ELT 480, relied on.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2335 of
1989.
From Order No. 766/88-C dated 24.10.1988 of the Customs
Excise and Gold (Control) Appellate Tribunal, New Delhi in
Appeal No. B/847/85-C.
V. Sreedharan, N.M. Poppli and V.J. Francis for the Appel-
lant.
Ashok H. Desai, Solicitor General, Ms. Randharangaswami
and P. Parmeswaran for the Respondent.
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, CJ. This is an appeal from the
order of the Customs, Excise & Gold (Control) Appellate
Tribunal (hereinafter called ’the CEGAT’) dated 24th Octo-
ber, 1988 under section 35-L(b) of the Central Excises &
Salt Act, 1944 (hereinafter referred to as ’the Act’).
The appeal which the CEGAT disposed of had been filed by
the Collector of Central Excise, Guntur against the order of
the Collector of Central Excise (Appeals), Madras dated 6th
February, 1985. The short question which arises in this
appeal is whether the lamination of duty paid kraft paper
with polyethylene resulting in ’polyethylene laminated kraft
paper’ would amount to ’manufacture’ and excisable under law
or not. It appears that the Collector (Appeals) in his order
following his earlier order in respect of the appellant
herein had taken the view that polyethylene laminated or
coated kraft paper obtained from duty paid kraft paper is
not liable to duty again.
632
The Collector of Central Excise, (Appeals), Madras had
followed the decision of the Division Bench of Andhra Pra-
desh High Court in the case of Standard Packagings, Nellore
v. Union of India, [1984] ECR 2635 (AP) for reaching the
aforesaid finding and held that the appellant would be
eligible to claim refund of duty paid by them in this re-
gard.
Lamination, indisputably by the well settled principles
of excise law, amounts to ’manufacture’. This question, in
our opinion, is settled by the decisions of this Court.
Reference may be made to the decision of this Court in
Empire Industries Ltd. & Ors. v. Union of India & Ors.,
[1985] 3 SCC 314. Reference may also be made to the decision
of this Court in Collector of Central Excise, Kanpur v.
Krishna Carbon Paper Co., [1988] 37 ELT 480. We are, there-
fore, of the opinion that by process of lamination of kraft
paper with polyethylene different goods come into being.
Laminated kraft paper is distinct, separate and different
goods known in the market as such from the kraft paper.
Counsel for the appellant sought to contend that the
kraft paper was duty paid goods and there was no change in
the essential characteristic or the user of the paper after
lamination. The fact that the duty has been paid on the
kraft paper is irrelevant for consideration of the issue
before us. If duty has been paid, then benefit of credit for
the duty paid would be available to the appellant under rule
56-A of the Central Excise Rules, 1944.
The further contention urged on behalf of the appellant
that the goods belong to the same entry is also not relevant
because even if the goods belong to the same entry, the
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goods are different identifiable goods, known as such in the
market. If that is so, the manufacture occurs and if manu-
facture takes places, it is dutiable. ’Manufacture’ is
bringing into being goods as known in the excise laws, that
is to say, known in the market having distinct, separate and
identifiable function. On this score, in our opinion, there
is sufficient evidence. If that is the position, then the
appellant was liable to pay duty. We are, therefore, clearly
of the opinion that the order of the CEGAT impugned in this
appeal does not contain any error. The appeal, therefore,
fails and is accordingly dismissed.
There will, however, no order as to costs.
G.N. Appeal dis-
missed.
633