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Seshasayee Paper and Boards Ltd. Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)(5)LC2054Tri(Delhi)
AppellantSeshasayee Paper and Boards Ltd.
RespondentCollector of Central Excise
Excerpt:
.....of paper, it was submitted that they should be treated as raw materials in the manufacture of paper/paper boards.3. the senior departmental representative made specific submissions in respect of sodium sulphate. as it is added in the recovery plant and not at the pulping stage, he argued that it is not used in the manufacture of paper as a raw material but as a medium in the recovery plant.4. in order dated 21-3-1984 in appeal no. ed (mas) 368/83 in the case of sandur manganese and iron ores ltd., yeshwantnagar v. collector of central excise, bangalore, this bench has already held that the term 'raw meterial' has to be interpreted in the circumstances of each case in the absence of any acceptable or useful definition of the term either in the dictionary or in the technical.....
Judgment:
1. By his order C. No. V/17/30/22/82, dated 10-8-1983, the Assistant Collector of Central Excise, Erode Division has disallowed the benefit of Notification No. 201/79 in respect of the following products claimed by the appellant as used in the manufacture of paper : 1. Alum 2. Sodium sulphide lye 3. Sodium sulphate 4. Daicol (Gaur gums) 5. Fluo solid lime.

In doing so, he found that for being entitled to the benefit of the said notification, the items should find a place in the final product.

When the matter was taken up in appeal, the Collector of Central Excise (Appeals), Madras, following the ratio of the decisions in earlier orders, decided that the chemicals referred to by the appellants cannot be considered as raw meterials of paper or paper boards (He even doubted whether resin which was allowed by the Assistant Collector could be considered as raw material but did not interfere with that part of the order) vide his order C No. V/17/71/83, dated 27-12-1983.

2. The representative of the appellants filed a detailed write-up as to the manner of use of each of the products in dispute. In respect of alum, he concedes that what is used for the treatment of water would not be covered by the notification. However, alum is also added to the pulp stock and intended for the precipitation and fixation of resin and dye-stuff on paper and it also helps to maintain the PH (acidity) value of the pulp on the wire in the paper machine. In respect of Sodium sulphide lye, it has been explained that the chemical exercises a highly beneficial effect on the pulping reactions and increases the rate delignification and the strength of pulp as well as reduces the cooking of pulping cycle. In respect of Sodium sulphate, it is urged that it is added in the soda recovery Section wherein black liquid is converted into white liquid as a process of recovery of Sodium hydroxide. It is not needed for the recovery process as such. It is really used at the stage of pulping, when it gets reduced to Sodium sulphide and functions in the manner indicated earlier. Daicol, a proprietary name for Gaur gums, serves the same purpose as resin, viz.

producing the desired strength for binding and increasing the wet strength of the paper. Fluo solid lime is claimed to be used for bleaching of pulp along with chlorine. As these are essential chemicals/raw materials in a recognised process of production of paper, it was submitted that they should be treated as raw materials in the manufacture of paper/paper boards.

3. The Senior Departmental Representative made specific submissions in respect of Sodium sulphate. As it is added in the recovery plant and not at the pulping stage, he argued that it is not used in the manufacture of paper as a raw material but as a medium in the recovery plant.

4. In Order dated 21-3-1984 in appeal No. ED (MAS) 368/83 in the case of Sandur Manganese and Iron Ores Ltd., Yeshwantnagar v. Collector of Central Excise, Bangalore, this Bench has already held that the term 'raw meterial' has to be interpreted in the circumstances of each case in the absence of any acceptable or useful definition of the term either in the dictionary or in the technical literature. Adopting this general approach, we find that alum which is added to pulp stock as distinct from what is used for treatment of Cauveri water, Sodium sulphide lye, Sodium sulphate, Daicol (Gaur gums) and Fluo solid lime used for the bleaching of pulp should be considered as raw materials in the manufacture of paper; they serve a distinct and definitive purpose in the normal and recognised process of manufacture of paper and are essential for the process of manufacture. The plea of the S.D.R. that Sodium sulphate which is added in the recovery plant should not be granted the concession, is resisted by the representative of the appellants with the explanation that addition of Sodium sulphate at the recovery stage of closed circuit is a measure of convenience, the black liquid which contains organic carbonaceous matter and during burning Sodium sulphate gets reduced to Sodium sulphide and with the addition of lime, Sodium hydroxide is produced. This along with Sodium sulphate is taken to the digester where, as observed earlier, sodium sulphide is formed and assists in the process of digestion. We do not think that the stage at which Sodium sulphate is added should make any difference to its being treated as raw material when we note that the addition at the recovery stage is a matter of convenience and not one for the purpose of recovery of Sodium hydroxide.

5. In the result, we order that the items referred to in para 3 supra, viz. Alum (in part), Sodium sulphide lye, Sodium sulphate, Daicol (Gaur gums) and Fluo solid lime, be allowed the benefit of Notification No.201/79, as amended by Notification No. 105/82 and allow the appeal.


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