Full Judgment
2.1 Shri G. Shiv Dass, ld. Advocate, submitted that they undertake the process of gum coating on stamp base paper supplied by the India Security Press in the form of sheet and reels; and that after the process of gumming they were slitting the paper in the form of sheets or reels. They claimed the benefit of Notification No. 49/87 which was allowed to them by the Assistant Collector in order dated 27-6-1990 holding that what was excluded from the scope of Notification No. 49/87 was "gummed or adhesive paper in strips or rolls" and not the gummed paper in sheet or reel form. The appeal was filed before the Collector (Appeals) by the Department on the ground that Note 7 to Chapter 48 in H.S.N. indicated, inter alia, that Heading 48.11 applied to paper, in strips or rolls, of a width exceeding 15 cms. and since the product under dispute was of a width exceeding 15 cms. it was roll and not a reel. The Collector (Appeals) allowed the appeal of the department holding that any paper which is in form other than sheet form is to be considered as in roll form and since the impugned product was in reel form i.e. other than sheet form, would not be entitled to exemption under Notification No. 49/87.
2.2 The ld. Advocate mentioned that the appeal was filed by the Department on the basis of Note 7 to Chapter 48 in HSN whereas the said Note did not find place in Chapter 48 in the Schedule to the Central Excise Tariff Act; that the Appellate Tribunal in the case of Systems Packaging Ltd. v. CCE -1990 (45) E.L.T. 165 held that the prescription under this Chapter cannot be used to interpret the entry in Central Excise Tariff Act since the said note is not found in the statutory Chapter Notes in Chapter 48 of the Central Excise Tariff Act. He also relied upon the decision in the case of Shantilal Doshi Pvt. Ltd. v.CCE -1991 (56) E.L.T. 263 in which the Appellate Tribunal held that if the gummed paper was cleared in reels, the benefit of Notification No.49/87 was available. He also contended that no evidence has been led in by the Revenue that the paper, after the process of gumming is known differently in the market and the gummed paper did not have a readymade market at all. Finally the ld. Advocate submitted that in the appellant's own case for the earlier period, the Collector (Appeals) had observed that the gummed paper was supplied by the Appellants only in the reel or sheet form and therefore the condition of the notification namely, that the gummed paper should not be in strips and roll form was satisfied.
3. Countering the arguments, Shri Satnam Singh, ld. SDR submitted that the benefit of Notification No. 49/87 is available subject to the condition that the gummed or adhesive paper is not in strips or rolls and as such the matter may be remanded for examining whether the impugned paper was in reel or roll form.
4. We have considered the submissions of both sides. We observe that the Assistant Collector in order dated 27-6-1990, after seeing the sample of the product and the supply order given by the India Security Press, Nasik, observed that the product of the appellants was in reels or sheets form. It was in the appeal filed by the Department before the Collector (Appeals) that a reference to Note 7 to Chapter 48 the H.S.N.was raised and it was contended that as the impugned product was of a width exceeding 15 cms. it was a roll and not a reel. But, Note 7 which finds place in H.S.N. has not been incorporated in Chapter 48 of the Schedule to the Central Excise Tariff Act. In absence of such a note in Central Excise Tariff, it cannot be read into the Tariff as the law maker has consciously not incorporated Note 7 into CETA. Reel (of paper or board), according to I.S.I. Specification No. 4661 - 1986 is continuous web of paper or board wound on a case whereas roll (of paper or board) is continuous strip of paper or board rolled around itself without a core. In the light of difference between "Reel" and "Roll" as per definition given in I.S. Specification, the Collector (Appeals) was not justified in holding that any paper which is in a form other than sheet form is to be considered as in roll form. As the Appellants were removing the impugned product in sheet or reel form, the prohibition contained in para 2 of the Notification No. 49/87, dated 1-3-1987 is not applicable and the benefit of Notification is available to the impugned product. Accordingly the appeal is allowed.