STAR PAPER MILLS LTD. versus COLLECTOR OF CENTRAL EXCISE, MEERUT

Citation: [1989] 3 S.C.R. 892 · Decided: 22-08-1989 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Case Partly allowed
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Judgment (excerpt)

A 
STAR PAPER MILLS LTD. 
.>., 
v. 
COLLECTOR OF CENTRAL EXCISE, MEERUT 
AUGUST 22, 1989. 
B 
[S. RANGANATHAN, N.D. OJHA AND J.S. VERMA, JJ.] 
).-
Central Excises and Salt Act, 1944: Section 2(f), 3 and 35L-
'Manufacture' includes any process incidental or ancillary to the com-
pletion of manufactured products-Whether paper core is used as a 
component part in the manufacture of paper rolls. 
")r_ 
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The appellant company carried on the business of manufacture 
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and sale of paper. It claimed exemption from payment of excise on 
paper core which, accordingly to the appellant, was used in the 
manufacture of paper. The case of the appellant was that the paper 
cores used in the manufacture of paper constituted "component parts" 
D within the meaning of Notification No. 201/79 dated June 4, 1979 as 
amended. The case of the respondent on the other hand was that the 
paper cores were really used by the appellant as packing material after 
the paper bad already been manufactured for taking it to the market 
and did not constitute "component parts" of paper. Tbe Assistant Col· 
r-
lector, Central Excise, rejected the claim of the appellant but its claim 
E on appeal as regards exemption from duty on paper cores was allowed 
by the Appellate Collector. The Customs, Excise and Gold (Control) 
" 
Appellate Tribunal however allowed the appeal of the Revenue. 
...
Partly allowing the appeal, this Court, 
, 
F 
HELD: I. Even though the term "component parts" has not -i 
been defined either by the Act or by the Notification, the term 
"manufacture" has been defind in section 2(f) of the Central Excises 
and Salt Act, 1944. This definition contemplates that "manufacture" 
includes any process, incidental or ancillary to the completion of a 
manufactured product. [8950] 
G 
2. In the absence of any definition of the term "component 
I 
parts" it is permissible to refer to the dictionary meaning of the word 
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"component". Accordingly to the dictionary meaning, the word "com-
ponent" inter alia means a constituent part. [895F] 
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3. If the use of paper core is necessary in ''any process incidental 
892 
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STAR PAPER MILLS v. COLLECTOR OF C.E. 
893 
or ancillary to the completion of" paper as marketable goods and it 
A 1 
would consequently be commercially inexpedient to sell paper without 
the use of paper core, it would certainly be a constituent part of paper 
and would thus fall within the purview of the term "component parts" 
used in the Notification. [896F] 
Mis J.K. Cotton Spinning & Weaving Mills v. Sales Tax Officer, 
B 
Nagpur and another, [1965] 1 S.C.R. Page 900 and Bhor Industrid 
Ltd. Bombay v. Collector of Central Excise, Bombay, [1989] 1 SCC 
602, referred to. 
4. Paper is made (1) in the form of rolls and (2) in the form of 
sheets and the paper which is sold in the form of sheets is cut in desired 
sizes. Even though rewinding has to be done both for manufacturing 
roll paper as well as sheet paper, use of Pl\Per core in rewinding is 
necessary 011ly with regard to manufacture of roll paper, inasmuch as it 
is the paper as rolled on paper core which is delivered to the cus-
tomer in the form of rolls and unless in the process of rewinding 
paper core is used, paper cannot come out of the machine in rolls 
so as to be sold as a marketable commodity known as roll paper. 
The use of paper core, tJowever, is not necessary for the manufac-
ture of paper sheets. [897E, 899G-900A] 
5. Use of paper core would come within the purview of the ex-
pression ••any process incidental or ancillary to the completion of man-
nfactnred products" nsed in the definition of the term "manufacture" 
in section 2(f) of the Act and for the same reason paper core would also 
be constituent part of paper and would thus fall within the term "com-
ponent parts" used in the Notification in so far as manufacture of paper 
in rolls is concerned. Paper core, however, cannot be said to be used in 
the manufacture of paper in sheets as component parts. [900E-F] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3474 
of 1988. 
c 
D 
E 
F 
From the Judgment and Order dated 10.5.1988 of the Customs 
Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal .G 
No. E/62/85-C. 
Harish N. Salve, Mrs. M. Sud, Ms. Aruna Jain and Praveen 
Kumar for the Appellant. 
B. Dutta, Additional Solicitor General, T.V.S.N. Chari and P. 
H 
Parmeshwaran for the Respondent. 
894 
SUPREME COURT REPORTS 
[1989] 3 S.C.R. 
A 
The Judgment of the Court was delivered
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