1. The captioned appeal was initially filed as a revision application before the Central Government which, -under the provisions of Section 35P of the Central Excises and Salt Act, 1944, -has come as transferred proceedings to this Tribunal for disposal as if it were an appeal filed before it.
2. The appellants are alleged to have manufactured and cleared waxed paper falling under Central Excise Tariff Item No. 17 valued at Rs. 1,96,429.73 paise during the period from 13-12-1978 to 17-2-1979 without payment of duty which was over and above the exemption limit of Rs. 5 lakhs admissible to them under Central Excise Notification No.71/78, dated 1-3-1978. The allegation was based on the fact that from the bills and invoices issued by the appellants, it was noticed by the Central Excise Authorities that during the period from 1-4-1978 to 17-2-1979, they had sold waxed paper of the value of Rs. 6,96,429.73 paise. Thus after allowing for the exemption of goods upto Rs. 5 lakhs, the appellants were alleged to have exceeded the limit by Rs. 1,96,429.73 paise. After conducting adjudication proceedings, the Collector of Central Excise, Chandigarh held that, in commercial parlance, the subject goods claimed to be known as "waxed wrapper" were nothing but "waxed paper", for wrapping purposes. Paper, as known in the market, is normally used for printing, writing or packing purposes.
Waxed wrapper paper was meant only for wrapping purposes. He further held that printing of the wrapping paper and the waxed wrapper with the names of market or manufacturing organisations, trade marks etc. was incidental to the use of paper for wrapping and that the goods did not constitute printed matter and were a kind of paper classifiable under Central Excise Tariff Item No. 17(2). The Collector held that the appellants were liable to pay duty on the value of Rs. 1,96,429.73 paise cleared by them without payment of duty. The appellants pursued the matter in appeal before the Board of Central Excise and Customs. In its impugned order dated 28-2-1981, the Board observed that Item 17(2) was widely worded and would cover all paper and paper boards which had been subjected to various treatments. Printing of specific designs and waxing were kinds of treatment of paper and the resultant product known in the trade as waxed paper or waxed wrapping paper could hardly be treated as an article of paper as contended by the appellants. In this view of the matter, the Board upheld the Collector's order. It is this order of the Board that is under challenge before us.
3. During the hearing before us, Shri A.K.S. Bedi, learned Counsel for the appellants took up only one contention. He said that waxed paper printed with specific matter for use by specific manufacturers was nothing but an article of paper. In this connection, he relied upon trade notice No. 183/81, dated, 16-12-1981 issued by the Chandigarh Central Excise Collectorate itself. The notice said that printed paper where design printing had been done which had a general effect would fall under Item No. 17(2) of the Central Excise Tariff Schedule. If, however, printing of design had relevance to specific consumers of the products contained in packets/ cartons and not to everybody in general, they would fall under Item No. 68. The Counsel produced a few samples of the product and argued that the goods had ceased to be mere paper but it had become a wrapper, an article of paper. He further submitted that if the claim for classification under Item No. 68 was upheld, the case might be remanded to the lower authority for determination of the liability of the goods to duty in the light of the exemption notifications under that Tariff Item.
4. Opposing the appeal, Smt. Vijay Zutshi, Learned Senior Departmental Representative, submitted that waxed paper first came into existence and that printing was done later when only it could be said that wrapper, a product of the packaging industry, came into the existence.
At this stage Shri Bedi, Counsel for the appellants, pointed out that printing was done first prior to waxing. The Departmental Representative agreed, with Shri Bedi that the printed waxed paper with specific designs would fall under Item No. 68.
5. We have considered the matter carefully, Since Shri Bedi has chosen to raise only one contention before us, we shall not go into the other contentions raised in the memorandum of appeal. From the samples produced before us, it is clear that the printing of designs is of specific relevance to specific products of specific manufacturers. The only question is whether in such a situation the product falls under Item No. 68 Central Excise Tariff as contended by Shri Bedi.
6. The manufacturing process, as set out by the appellants in their reply to the Collector's show cause notice, is that the appellants purchase duty-paid poster paper and kraft paper in reels [these fall under Item No. 17(2) and are duty paid]. The paper is printed with material like description, brand name, price etc. of the product to be wrapped and other particulars in accordance with the specimen art work of the customers. After printing, the paper is subjected to the process of roll-waxing. The product is commercially known as waxed wrapper and is mentioned as such in the contracts for supply and sale documents. In the case of customers like Modern Bakeries India Ltd., who have automatic slicing and wrapper machines in their own units, cutting of the waxed wrapper sheets is not done by the appellants., In the case of other customers where the wrapper is required to be supplied in various cut sizes for wrapping of bread, biscuits etc. the printed reels are first cut to the required dimensions by the appellants. First, the cutting to the required width is done at the appellants unit and such cut rolls are sent to another premises where they are cut to the required length with the aid of a power-operated machine and thereafter subjected to waxing without the aid of paper by a hand operated waxing machine. The final product is supplied by the appellants.
7. The above narration of the manufacturing process has not been disputed by the department. It is clear that the paper is first subjected to printing and then waxing. Printing of the blank paper with designs and reading matter would not bring into existence a new product classifiable under Item No. 17(2) Central Excise Tariff. But when such paper is subjected to waxing, a distinct commodity, namely, waxed paper (even if it is waxed wrapper paper) comes into existence. Waxing is a treatment imparted to paper. The authorities have, therefore, rightly classified the waxed paper under Item No. 17(2) Central Excise Tariff.
There can be no doubt that when such paper is supplied in reels without being cut into the required width, length etc., the paper remains under Item No. 17(2). Even when it is supplied cut to the required dimensions it does not cease to be paper. It-'is' not, in our view, classifiable as an article of paper in the sense an envelope, a bag, a packet or carton is. We think it continues to be waxed paper.
8. We reject the appellants' contention that waxed paper with printing of specific relevance to specific products and manufacturers would 'tall' under Item 68 Central Excise Tariff. In this view of the matter, we reject the appeal.