1. The question for decision in this appeal by the Revenue is proper classification of respondents product "Diamond Coat Art Paper" and "Diamond Coat Chrome Paper" -Diamond being brand name - whether it falls under Tariff Item 17(1) of the First Schedule to Central Excises and Salt Act, 1944 as it stood after its amendment on 28-2-1982 hereinafter called Central Excise Tariff and if so not eligible to exemption from demand of duty under Notification 63/82-C.E., dated 28-2-1982 or Tariff Item 17(2) of the Tariff making it eligible to exemption under the notification.
2. The present dispute arises under the following circumstances.
Earlier the respondents had been classifying two description of papers set out above under Tariff Item 17(1) as coated printing and writing paper until amendment of Tariff Item 17 on 27-2-1982. Simultaneously with this amendment Notification 63/82-C.E., dated 28-2-1982 exempting converted types of paper and paper board other than wall paper, art and chrome board falling under sub-item (2) of Item 17 of the Tariff from whole of the duty of excise leviable thereon subject to fulfilment of base paper having paid appropriate duty was issued. The respondents then filed classification list effective from 28-2-1982 claiming classification of their product under Tariff Item 17(2) and exemption under Notification 63/82, dated 28-2-1982. The Assistant Collector of Central Excise after serving notice dated 2-6-1982 on the respondents proposing to reject the claim for re-classification and after following usual procedure by Order-in-Original dated 2-7-1982 held that till then the respondents had been classifying their paper under Tariff Item 17(1) as a type of printing and writing paper and just because certain papers classifiable under Tariff Item 17(2) got the benefit of exemption notification, it will not be correct to change the basic classification of paper because of change in the rate of duty by way of notification. He further held that the two descriptions of paper are nothing but printing and writing paper classifiable under Tariff Item 17(i) and not eligible to benefit of the notification which is applicable to certain categories of paper falling under Item 17(2). In appeal by the respondent the Collector of Central Excise (Appeals), Bombay by order dated 31-12-1984 held in favour of the respondents (appellants before him) and disagreeing with the Assistant Collector he held that the two descriptions of paper were correctly classifiable under Tariff Item 17(2) of the Tariff and not under Tariff Item 17(1) and as converted paper they were eligible to exemption under Notification 63/82, dated 28-2-1982 provided the conditions stipulated in the said notification were fulfilled. He allowed the appeal.
Aggrieved with this decision the Revenue has come up in appeal to the Tribunal.
3. At the hearing of the appeal Shri A.S. Sundar Rajan, 3DR drew our attention to samples of the base paper used by the respondents indicating the two descriptions of paper under dispute. It was explained that base paper in case of Diamond Coat Art Paper weights 60 to 140 gms. per sq. meter and on conversion by the respondents it weights 95 to 180 gms. About Diamond Coat Chrome Paper it was given out that base paper weights 55 to 150 gms. per sq. meter and coated paper 70 to 170 gms. per sq. meter. The difference of weight in the case of first item is in the range of 35 to 40 gms. and in the case of second item it is 15 to 20 gms. He submitted that prior to 1982 the respondents have been classifying their two descriptions of manufacture under Tariff Item 17(1) and the amendment in 1982 did not effect any change in the two sub-items and there was no provocation for the respondents for filing a revised classification list and claiming change in classification. He, however, admitted that in taxation matters like the present there was no estoppel or res-judicata and law did not prohibit the respondents from claiming an altered classification. He also admitted that the respondents two descriptions of paper are converted paper. He explained that art paper is one when both sides are coated and chrome paper is one when one side is coated.
During argument he referred to a publication - Paper Industry in India Retrospect and Prospects Editor S.P. Ahuja prepared and published by The Institute of Economic and Market Research, New Delhi. In this publication Coated (Art and Chrome) Paper figures at Serial No. 9 of Printing Paper. Shri Sundar Rajan relied on IS 4658-1968 (Reaffirmed 1977) Specification for coated paper and board (Art and Chrome) (Second Reprint September, 1983) published by ISI Manak Bhavan, New Delhi. He also referred to Indian Standard Glossary of Terms used in Paper Trade and Industry Second Reprint April, 1982 published by ISI Manak Bhavan, New Delhi, containing, inter alia, meaning of Chrome Paper and Coated Paper. He also relied on page 678, Vol. 2 of Explanatory Notes to CCCN to draw support for his arguments as to commercial understanding. Shri Sundar Rajan argued that undoubtedly the respondents two description of manufacture are coated printing and writing paper. Coated printing and writing paper are specifically mentioned in Tariff Item 17(1) and, therefore, no further enquiry is required to be made. At the reopened hearing the process of manufacture as to the paper under dispute received from the manufacturer respondent was also placed on record by Shri Sundar Rajan. Shri Sundar Rajan again admitted that the paper under dispute is converted paper. Papers placed at the reopened hearing, besides the process of manufacture, have also as annexures an opinion given by K.C. Varma, Paper Technologist and an extract from a publication Pulp and Paper October, 1986 by 3ohn C.W. Evans, Senior Editor under the title New Coaters Improve Printability of Folding Combination Box Board. There is also a photocopy of catalogue Speedsizer and an extract from Sizing and Coating of Paper - Literature Survey. Shri Sundar Rajan in his argument relied on the following decisions :Collector of Central Excise, Bombay v. Rohit Pulp and Paper Mills Ltd.Sha Harakchand Samarathmal, Madras v. Collector of Customs, Madras - 1983 (12) ELT 382 (CEGAT); Khoday Industries Limited v. Union of India and Ors. -1986 (23) ELT 337 (Karnataka);Guardian Plasticote Ltd., Calcutta v. Collector of Central Excise, Calcutta and Ors.
4. Shri C.S. Lodha, learned Advocate for the respondent submitted that base paper which was printing and writing paper, at the time of manufacture, was giving china clay coating and paid duty as printing and writing paper under Tariff Item 17(1) of the Tariff. The respondents received this duty paid base paper, samples of which were at page 12 of the paper book. He posed a question as to whether material of coating is determinative of classification He submitted that metal coated, PVDC-coated, LDPE-coated paper are all classified by Revenue under Tariff Item 17(2). It does not therefore, stand to reason that clay coated paper in the case of respondents should be classified under Item 17(1) of the Tariff. According to him, scope of Item 17(2) is relatable to the processes enumerated in Tariff Item 17(2) and not to material of coating. Proceeding further, he submitted that base paper had discharged duty liability under Tariff Item 17(1) as printing and writing paper and if according to Revenue, inspite of further china clay coating, it was printing and writing paper, there was no question of respondents being called upon to pay duty again under Tariff Item 17(1) on printing and writing paper because name, character or use of the paper as a result of china clay coating has not changed, a new and distinctive Article had not emerged and there was thus no manufacture.
In the alternative, he submitted that if coating the base paper with china clay constituted manu-fature, then such paper would fail under Tariff Item 17(2) in which case, as converted paper, it would be eligible to exemption under Notification No. 63/82, dated 28-2-1982. In either case, there would be no duty liability on the respondent. He further submitted that show cause notice against the respondent was based on the allegation that the paper manufactured by the respondent was not in the commercial or trade parlance known as converted type of paper. In view of the fair concession by the Departmental Representative that the goods are converted type of paper, edifice of the whole case of Revenue disappears. For the submission that coated paper would fall under Tariff Item 17(2), he relied on the following three decisions -Kiran Printing and Packaging, Bombay v. Collector of Central Excise, BombayEntremonde Polycoaters Pvt. Ltd., Nasik v. Collector of Central Excise, PuneCollector of Central Excise, Calcutta v. Calcutta Paper Rolls Manufacturing Co., Calcutta In the arguments, Shri Lodha also relied on the following two Supreme Court decisions and a Tribunal decision :-State of Tamil Nadu v. Pyare Lal Malhotra etc, - AIR 1976 Supreme Court 800.
(5) Alladi .Venkateswarlu and Ors., etc. v. Government of Andhra Pradesh and Anr., - AIR 1978 Supreme Court 945.Collector of Central Excise, Hyderabad v. Sri Balaji Cable Industries, Anantapur Shri Lodha distinguished 1983 (12) ELT 382 (CEGAT) relied on by Shri Sunder Rajan urging that dispute in the decision was whether the goods was board or paper. The question involved in the present appeal is different. About 1986 (23) ELT 337 (Khoday Industries Ltd. v. Union of India and Ors.), he submitted that it is not applicable to the present appeal. About 1986 (24) ELT 542 (Guardian Plasticote Ltd., Calcutta v.Collector of Central Excise, Calcutta and Ors.), he submitted that it is not relevant to the present appeal. Relying on Supreme Court decision in Atul Glass, Shri Lodha submitted that CCCN could not be made use of for interpreting the Central Excise Tariff.
5. In rejoinder, Shri Sunder Rajan submitted that there was no warrant or material for Shri Lodha to submit that base paper was coated paper.
He submitted that china clay coating is not coating. Proceeding further, he argued that if printing and writing paper is subjected to a process of coating and resultant product is coated, printing and writing paper, it will fall under Tariff Item 17(1). Any other interpretation will make the second portion of Item 17(1) nugatory. It was also submitted that on record, there is no finding of lower authority that base paper is coated paper. He also submitted that every time there is coating, duty would have to be paid even if taxable description does not change. On the question of manufacture, he relied on 1986 (26) ELT 211 and Supreme Court judgment in 1986 (25) ELT 473 (S.C.): He distinguished 1984 (3) ETR 674 urging that in that case, end use changed from printing and writing paper to packaging. Hence classification different from 17(1). About 1984 (16) ELT 389, he submitted that laminated paper was used for packing. In both the cases, the process involved was lamination. About 1984 (4) ETR 120, he submitted the same argument for distinguishing the same. He also urged that the Collector (Appeals) had not given his own findings and had not applied his mind. For this reason only, the order should be set aside and the matter remanded for de-novo consideration.
6. Before dealing with the submissions advanced by the parties it would be useful to refer to the process of manufacture of the two varieties of paper in question and the relevant portions of the Tariff item as it stood at the material times and Notification No. 63/82-C.E., dated 28-2-1982.
"Tariff Item 17 - Excise Tariff, 1982. - Paper and Paper Board, all sorts (including pasteboard, millboard, strawboard, card-board and corrugated board) and articles thereof specified below, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power - (1) Uncoated and coated printing and writing paper (other than poster paper); (2) Paper board and all other kinds of paper (including paper or paper boards which have been subjected to various treatments such as coating, impregnating, corrugation, creping and design printing), not elsewhere specified - (a) All sorts of paper commonly known as kraft paper, including paper and paper board of the type known as Kraft liner or corrugating medium, of a substance equal to or exceeding 65 grams per square metre in each case; Note :- Tariff Item 17 prior to 28-2-1982 was materially the same as Item 17(1)(2) reproduced above. Items (3) and (4) providing for Carbon and other copying papers and Boxes, Cartons, Bags and other packing containers were not there.
"In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 the Central Government hereby exempts converted types of paper and paper and paper board (other than wall paper, art and chrome board), falling under sub-item (2) of Item No. 17 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from the whole of the duty of excise leviable thereon, if such converted type of paper or paper board has been produced out of base paper or base paper board on which the appropriate duty of excise or the additional duty leviable under Section 3 of the Customs Tariff Act, 1975 (51 of 1975), as the case may be, has been paid : Provided that such base paper or base paper board has not been produced out of pulp within the factory of production of the said converted type of paper or paper board.
Explanation : For the purpose of this notification, the base paper or base paper board used in the manufacture of the said converted type of paper or paper board shall be deemed to have paid the appropriate duty of excise or the additional duty leviable under Section 3 of the Customs Tariff Act, 1975 if it is purchased from the market." "...On the basis of the literature submitted by the party relating to the manufacturing process of the surface-sized base paper received by them for coating at their mills, and the subsequent report received from A.C. Nasik vide his letter No. V.48(17)171/VC/86, dated 4th May, 1987, it appears that the surface-sizing that is done to bring into being S.S. Maplitho paper - base paper - which comes into M/s. Vindhya Paper Mills, imparts "the extra surface coating through size press either of starch alone or with pigments like China Clay and additives in small quantity" and that this base paper is supplied to Shree Vindhya Paper Mills, Nasik, where a further coating is given of additional materials." Indian Standard Glossary of terms used in Paper Trade and Industry Second eprint April, 1982 IS : 4661-1968 has about Chrome Paper, Coated Paper d allied expression 'Coating' the following to say - Chrome Paper. - A Paper coated on one side, after manufacture, with material containing adhesive, kaolin, etc. to give a surface for fine screen half-tone work capable of accepting coloured printing specially in lithography.
Coated Paper. - Paper which has undergone a coating process (see 'Coating') on one or both sides.
Coating. - The process of covering the surface of a paper or board with one or more layers of coating slip. Indian Standard specification for coated paper and board (Art and Chrome) Second Reprint September, 1983 IS : 4658-1968 had, inter alia, the following to say - 0.2 This standard has been formulated to define the quality of coated papers and boards (art and chrome). Art papers and boards are coated on both sides while chrome papers and boards are coated only on one side. These papers are generally used for fine decorative printing 3.1 General - The paper or board shall be uniform in thickness, free from holes, hard spots and limps shall lie flat and be dimensionally stable. The printing surface shall be smooth, of even finish, formation, absorbancy and colour. Both sides in the case of art paper and board, and coated side in the case of chrome paper and board, shall be clean and free from loosely bound fibres and blisters.
IS. specification for writing and printing papers (Second Revision) IS : 1948-1981, has the following to say - "3.1 Writing and printing papers shall be of uniform formation, other blemishes. When tested according to 9 of IS : 5285-1969, the furnish for all varieties shall not contain more than 20 percent of the mechanical pulp." Paper Industry in India Retrospect and Prospects (supra) under the heading Printing Paper lists at Item 9 Coated (Art and Chrome) Paper.
7. As for Sundar Rajan's reliance on CCCN the same cannot be taken into consideration in view of the Supreme Court decision in Atul Glass Industries Ltd. case 1986 (25) ELT 473 (S.C.). In para 10 of this decision the Supreme Court has held First Schedule to the Central Excises and Salt Act does not appear to have been modelled on the BTN and reliance of the Revenue on the same would not advance their case.
In view of this decision we have ignored the CCCN relied on by Shri Sundar Raj an and have not reproduced material portions of the same.
From the process of manufacture reproduced above it appears to us that the paper obtained by the respondent from the market is coated paper because it has been subjected to China Clay coating. It is subjected to coating again at the respondents factory. Shri Sundar Rajan has no doubt argued that China Clay coating is not coating as understood in Paper Industry but sufficient material is not there on record to appreciate this argument. It would therefore be held that what the respondent obtains from the market is coated paper which has borne duty under Tariff Item 17(1) as uncoated and coated printing and writing paper.
8. The show cause notice dated 2-6-1982 served on the respondent proposing to deny classification at nil rate of duty under Notification 63/82-C.E., dated 28-2-1982 was on the premise that the respondents product was not known in market/trade parlance as converted type of paper. Material portion from the notice is reproduced below : "Whereas it appears from the description of paper that the said paper is coated paper correctly classifiable under Tariff Item 17(1) and is not converted type of paper as being not known in the market/trade parlance as converted type of paper commonly known as limitation flint paper or limitation leatherette paper or limitation plastic coated paper etc. Moreover the exemption under Notification No, 63/82 is applicable to paper and paper board (other than wall paper, art and chrome board) falling under Tariff Item 17(2) and not to the coated and uncoated printing and writing paper falling under Tariff Item 17(1)." Now Shri Sundar Rajan has frankly conceded before us that the respondents product is converted paper. Therefore, the sheet anchor of.
the Revenue's case for denying classification as claimed by the respondents disappears and on this short ground the appeal deserves to be dismissed.
9. As for Shri Sundar Rajan's strong reliance on the Tribunal decision in 1983 (12) ELT 382 and the argument that the case directly covers the issue involved in the present appeal, on going through the decision it is seen that the case related to one of import where besides Heading 48.01/21(1) of CTA 1975 Items 17(2) and 17(1) were also involved. The Tribunal on examination of the sample produced before it and the proceedings of the Collectors conference as contained in Public Notice 211/81 as also failure to comply with the principles of natural justice allowed the importers appeal and accepted the importers claim for classification that the paper in question of 165.9 gms. per square metre was not board but printing and writing paper. We agree with Shri Lodha that the issue involved in the appeal was different and this could not be pressed as a precedent for deciding the present controversy.
10. As for Shri Sundar Rajan's reliance on Rohit Pulp and Paper Mills Ltd. case 1985 (21) ELT 571 (Tribunal) and reference to the submissions of Shri Hidayatullah, Learned Counsel for the respondent manufacturer as set out in para 7 we observe that the dispute related to the period 13-4-1976 to 31-1-1977. The question formulated by the Tribunal was whether Maplitho paper of grammage ranging from 140 grammes per sq.
metre to 179 GSM was classifiable as printing and writing paper under Item 17(1) of the Central Excise Tariff or as other kinds of paper under Item 17(2). The Tribunal in para 11 of the order observed that the Tariff Item 17 relating to paper does not lay down any demarcating line between printing and writing paper and other kinds of paper dependent on the grammage of the paper. They further held that grammage alone would not constitute the basis for classification of a paper as printing and writing paper or another kind of paper. The Tribunal further held that in a fiscal or taxing statute the burden of proving the necessary ingredients laid down by law to bring goods within a taxing entry is upon the taxing authority. The Tribunal further observed that while the respondent manufacturer had adduced sufficient evidence in support of their contention that the subject Maplitho paper was printing and writing paper, the appellant Revenue had not discharged the onus nor had produced satisfactory evidence in rebuttal.
They also observed that it was not a case where two views were equally possible. They vacated the show cause notice and rejected the appeal.
It does not appear that in this case any question as to manufacture or goods having paid duty as uncoated or coated printing and writing paper and then demand being again made under the same description was involved. We do not think that this decision would help the appellant.
11. As for Khoday Industries Ltd. case 1986 (23) ELT 337 (Karnataka) the goods related to the periods 16-10-1978 to 18-4-1979 and 16-4-1979 to 22-2-1980 i.e., a period prior to amendment of Tariff in 1982 which is the period involved in the present appeal. The decision related to classification of carbon paper. Shri Sundar Rajan has relied on the observation of the High Court in para 13 to the effect - "There is force in the contention of Sri Bhat that so far as the process that the ordinary paper undergoes and the treatment that is given to base paper for converting it into carbon paper, it may appropriately fall under the description of 'coated paper'". We do not see how this decision helps the appellant. A sentence from a decision culled out of contents may not be determinative of the true nature and effect of the decision.
In the instant case Shri Lodha does not say that no manufacture has taken place. In fact, his contention is that uncoated and coated printing and writing paper has been subjected to processes constituting manufacture taking it out from this description and took description obtaining in Item 17(2). His alternative submission has already been reproduced above. Taking into consideration the submissions advanced in the case the decision would not help the appellant.
12. As for Shri Sundar Rajan's strong reliance on Guardian Plasticote Ltd. - 1986 (24) ELT 542 (Tribunal) (a Larger Bench decision) it is seen that the decision related to the question whether inspite of omission of processes of coating and lamination in the Tariff Item on application of such processes manufacture could be said to have taken place. In para 12 the majority of the Members constituting the Bench formulated the question as follows : "Whether by reason of the said process another distinctive product having a distinctive name, character and use had emerged. If this question is answered in the affirmative the process would have to be classified as manufacture within the meaning of the Central Excises and Salt Act." From para 13 of the decision it is seen that based on the admission made by the appellants counsel Shri Gupta and the admission contained in the appellants writ petition before the Calcutta High Court the Tribunal came to the conclusion that kraft paper subjected to the process of lamination by laminating by two layers of kraft paper with polythene resulted in a new and distinct commercially known articles.
Relying on the Supreme Court decision in Empire Industries v. Union of India - 1985 (20) ELT 179 (S.C.), the Tribunal held 'manufacture' to have taken place. The main question in the decision was not under what Tariff Item the goods fell but whether manufacture had taken place.
Allied question was whether duty could be demanded under the same sub-item but the Tribunal rejected the argument of the manufacturer relying on Supreme court decision in Empire Industries case (supra) for the reason that the process of lamination employed by the manufacturer results to the emergence of a new and distinct commercial product marketable as such resulting in manufacture and attracting duty liability. Such is not the position here as against the admitted position obtaining in the decision. The issue involved in the decision was different. The decision would not help the appellant.Entremonde Polycoaters Pvt. Ltd., Nasik v. Collector of Central Excise, Pune - 1984 (16) ELT 389 (Trib.) related to the period 1974-76 till the date of issue of. show cause notice dated 23-1-1979 issued by the Additional Secretary to the Government of India which was transferred to the Tribunal to be disposed of as an appeal presented before it. The Assitant Collector had called upon the manufacturer to show cause why plastic coated paper should not be classified under Item 17(2) and pay duty at appropriate rate. In this decision duty paid printing and writing paper coated/laminated with plastic was held classifiable under Item 17(2) and this the Tribunal held does not amount to double taxation. After referring to the Tribunal decision in Golden Paper Udyog Pvt. Ltd. case the Tribunal observed as follows : "M/s. Entremonde's product has not paid 17(2) duty before; it paid only 17(1) duty. It appears to have migrated, so to say, from one duty zone to a different duty zone when it was subjected to the process by M/s. Entremonde's factory. That decision, there fore, will not protect M/s. Entremonde's product frorm being Charged to duty under 17(2)." The position emerging from the decision, however, is that what the Assistant Collector in his Order-in-Original described printing and Writing paper after coating with PVC sheet rolled on to the papers-was held dutiable under 17(2). 1. The other decision relied on byoShri Lodha is Uma Laminated Products Pvt. Ltd. - 1984 (4) ETR 12O.In this decision poly-coating/poly lamination of Kraft paper was held to be amounting to manufacture and poly-coated laminated paper held classifiable under17(2). para of the decision sets out Tariff Item prior to 1976 Budget and as altered in 1976 Budget. The two sub-items with which we are now concerned were substantially the same as Items 17(1) and 17(2) of the Tariff as altered by 1976 Budget. The decision held as under : "Hence, on a very careful analysis, it is reasonable to conclude that both treated and untreated paper fall for classification under Item 17(2) and attract duty separately subject, of course, to such duty adjustments (set off credit of duty) as may be available. This, in our opinion, would bring about harmony among Tariff. Item 17, Notifications 71/76 and 71/77 issued in relation to treated paper and Rule 56A. It will be seen that the above statutory notification exempted certain specified varieties of treated paper, including polyethylene coated paper falling under Item 17(2) from Excise duty leviable thereon in excess of 12.5% ad valorem subject to certain specified conditions, one of them being that the base untreated paper should have borne the appropriate Excise duty or additional duty of, Customs." The position that emerges from the1 decision is that coated paper was held classifiable under 17(2). To our mind, if base paper originally coated or uncoated printing and writing paper is subjected to processes and the treatments set out in sub-item (2) then it should, regard being had to enunciation made in this decision, fall under Tariff Item 17(2).
15. Above apart Shri Lodha has filed sample of papers and end use chart. From this it is seen that Metal coated paper, PVDC coated paper, LDPE coated paper, Waxed paper, all the four used after coating as above for printing and then packing are classified under Tariff Item 17(2). This position has not been disputed by Shri Sundar Rajan for the appellant Revenue. Diamond Art Coat Paper and Diamond Coat Chrome Paper after coating are subjected to printing and then used packing. There is apparently no reason why these coated papers should be held classifiable under Tariff Item 17(1) and not 17(2).
16. As for Shri Sundar Rajan's reliance on Indian Standard Specifications (supra) for the argument that the two descriptions of paper are printing and writing paper it is sufficient to say that in Indian Aluminium Cables Ltd. case 1985 (21) ELT 3 (S.C.), the Supreme court held that specifications issued by the Indian Standard Institution are for ensuring quality control and have nothing to do with the class to which the goods belong in a Tariff Schedule. Having regard to this decision, we do not think that reliance by Shri Sundar Rajan on ISI specifications advances their case. As for Shri Sundar Rajan's reliance on the publication Paper Industry in India referred to in para 3 above, the same in view of the precedents in favour of the respondent discussed above does not help the appellant.
17. There is another reason why the appeal must fail. If inspite of the process of coating the papers remain printing and writing paper then it cannot be said that the processes have brought about a change in name character or use and if that be so no manufacture having taken place the two descriptions of paper would not attract central excise duty liability.
18. Apart from the infirmity in the show cause notice if as claimed by the appellant-Revenue base paper which has discharged duty liability as coated and uncoated printing and writing paper after being subjected to processes and further coating by the respondents still remains printing and writing paper, though commercially the name of the paper may have changed its character or use as printing and writing paper had not changed. An Article with a different name commercially may have emerged but it is not a distinct Article with different character or use. We do not see how in this state of things it can be said that manufacture has taken place. Besides, the respondents claim that base paper received by them is clay coated. The appellant, however, maintains that it was not coated and in Paper Industry clay coating is not understood to be coating. There is no material to substantiate this plea of the appellant. If no manufacture has taken place the goods would not attract central excise duty liability. If as urged by the respondent 'manufacture' has taken place the goods travel from Items 17(1) to Item 17(2) and are eligible to benefit of Notification 63/82-C.E., dated 28-2-1982 as converted paper as they are made from duty paid base paper. Thus in any view of the matter the respondent cannot be called upon to pay duty. The respondent claims that the goods fall under Tariff Item 17(2) and are exempt under the notification. Even the appellant has conceded before us that it is converted paper but never-the-less maintains that it is coated and uncoated printing and writing paper falling under Item 17(1) attracting duty liability again.
We have already said how this plea is untenable. In this view of the matter we are not inclined to interfere with the order of the Collector (Appeals) holding the goods as falling under Item 17(2) and exempt under Notification 63/82-C.E., dated 28-2-1982.