COLLECTOR OF CENTRAL EXCISE, GUNTUR versus M/S ARUNA STRAW BOARDS (P) LTD.

Citation: [1999] SUPP. 1 S.C.R. 529 · Decided: 27-08-1999 · Supreme Court of India · Bench: K. VENKATASWAMI · Disposal: Dismissed

Judgment (excerpt)

COLLECTOR OF CENTRAL EXCISE, GUNTUR 
v. 
M/S ARUNA STRAW BOARDS (P) LTD. 
AUGUST 27, 1999 
[K. VENKATASWAMI AND M. JAGANNADHA RAO, JJ.] 
Excise-Central Excise Tariff Act, 1985-Tariff Item 17-Single ply 
straw boatds manufactured by the respondents used in manufacture of multiple 
A 
B 
ply straw boards-Such multiple straw boards cleared on payment of duty-
Held, single ply straw boards and multiple ply straw boards covered by the C 
same Tariff Item 17 as straw boards and both these articles were the same 
articles-Hence single ply straw boards not liable to duty. 
The respondents were manufacturers of paper boards falling under 
Tariff Item 17 of the Central Excise Tariff. A portion ofsingle ply straw D 
boards manufactured by the respondents was used in the manufacture of 
multiple ply boards within the factory of production. A major portion of the 
single ply boards was cleared on payment of duty at the factory gate. Multiple 
ply straw boards were removed from the factory after payment of duty. A show 
cause notice was issued by the Revenue as to why duty should not be levied 
on single straw ply boards used for the manufacture of multiple ply boards E 
within the factory. The Assistant Collector after going through the reply of 
the respondent, found that there was no essential difference in identity 
between the original commodity, namely single ply straw board, and the 
processed article, namely, multiple ply straw boards. Revenue thereafter 
preferred an appeal before the Collector (Appeals), who affirmed the order 
passed by the Assistant Collector. The Collector (Appeals) referring to the F 
tariff description under item 17 at the relevant time which reads as "paper 
and paper board, all sorts (including paste board, mill board, straw board, 
cardboard and corrugated board) and .... ", held that the straw board whether 
it was single ply or double ply or triple ply or multiple ply would continue 
to be described as straw board and the same would fall under the same sub- G 
item of Tariff Item 17. Revenue then filed an appeal before the Tribunal, and 
it also came to the conclusion that both single ply and multiple ply straw 
boards answered the description of straw boards and multiple straw boards 
could not be considered as paste boards even in terms of definition given in 
the ISi cited by the Revenue. Tribunal also discussed the decision of a five-
529 
1-1 
530 
SUPREME COURT REPORTS [1999] SUPP. l S.C.R. 
A member Bench of the Tribunal in the case_ of Guardian Plasticote* and also 
.. 
on the decision of the Bombay High Court in Babubhai Nylchand** to hold 
that in view of the decision of the Bombay High Court(**), the decision of 
five-member Bench of Tribunal(*) could not be followed. The Tribunal also 
referred to the provisions of Rule 49(4) read with Rule 9 of the Central 
B 
Excise Rules before dismissing the appeal filed by the Revenue. The majority 
decision of the Tribunal was dehors the decision of the Bombay High Court(**) 
and also the five-member Bench decision of the Tribunal(*) and it rested on 
the scope and interpretation of Tariff Item 17. Hence this appeal. 
It was contended by the Revenue that the decision of the Bombay High 
c Court (**) has since been overruled by this Court(***) and therefore, the 
decision of five-piember Bench of the Tribunal (*) had to be set aside. 
However, it was not contended that on the finding of the adjudicating authority 
or lower appellate authority or Tribunal on the scope of Tariff Item 17 as well 
as the findings that single ply and multiple ply boards are both straw boards 
as enumerated in the said Item. 
D 
Dismissing the appeal, the Court 
HELD: On the interpretation of Tariff Item 17 the Collector (Appeals) 
' 
held that charging single ply straw board to duty and again charging multiple 
~ 
ply straw board manufactured out of such single straw board sheets within 
E the same factory to duty would clearly amount ~o double Levy. This view has 
been approved by the Tribunal Vice President (J), with whom the Member 
(Technical) has concurred. That being the position, the reversal of the 
decision of the Bombay High Court(**) by this Court in Babubhai (***),is 
not relevant and the same cannot be pressed into service to upset the decision 
F of the Tribunal. (532-B-D] 
*Guardian Plasticote Ltd. v. CCE, (1986) 24 ELT 542; **Union of 
India v. Babubhai Nylchand Mehta, (1988) 33 ELT 292 (Born) and ***Union 
of India v. Babubhai Nylchand Mehta, (1991)

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