S.L. Peeran, Member (J)

1. The appeals in reference relate to the grant of exemption of duty, with reference to interpretation and applicability of Notification No. 142/81, dated 8-7-1981 to the appellant, who are manufacturers of a variety of paper known as mill wrapper. Their contention is that mill wrapper is nothing but Kraft Paper, which is an unbleached variety of paper containing not less than 75% by weight of the pulp made from Bagasse. They contend that they have fulfilled the terms of the said Notification and are entitled for full exemption from the payment of the duty. Alternatively, they have contended that mill wrapper is always consumed captively and is not liable to duty under Notification No. 187/83-C.E., dated 9-7-1983 subject to the conditions set out therein. Yet if this plea is also not accepted, even so, mill wrapper manufactured and captively consumed inside the factory should be, charged to duty only at the rate of Rs. 900/- per MT + 5% SED which was the rate approved by the Department in respect of mill wrapper in the Classification List effective from 2-4-1983.

2. Appeal No. 161/87 deals with the dispute pertaining to the non-approval of classification list No. 13/83 effective from 21-6-1983 and grant of exemption under the above said Notification, while Appeal No. 162/87 is directed against the confirmation of demand raised by Superintendent as short levy for Rs. 1,82,889.53 in terms of the disallowance of the claim of the benefit of the Notification in reference.

3. The Assistant Collector in his order dated 19-3-1984, while rejecting the grant of the benefit of Notification has observed that the classification list refers to "Mill Wrapper". The Notification No. 142/81, dated 8-7-1983 applies to "Unbleached Variety of Paper (Kraft Paper)" and restricts to only Kraft Paper and not to Mill Wrapper.

4. The Collector (Appeals) has disposed of both the question of grant of exemption under the said Notification and the confirmation of demand of short levy by a common order. The learned Collector has agreed with the reasoning of the Assistant Collector and has held that "Mill Wrapper" is not Kraft Paper and the Notification in operation restricts to Kraft Paper alone. The appellants have contended that the Notification exempt unbleached varieties of papers (kraft paper). Thus, unbleached varieties of paper as such are exempted. There is no further requirement that the unbleached varieties of paper must be a Kraft Paper. Technically, there is no kraft paper which is bleached. All Kraft Paper is unbleached. Consequently, unbleached varieties of paper is a term of wider import. Unbleached varieties of paper is the genus of which a Kraft paper is its species. If the reasoning of the lower authorities is to be accepted then the use of expression unbleached varieties of papers would become redundant and nugatory. They contended that an interpretation which would render any statutory provision redundant and nugatory should be avoided. They further contended that on the other hand, if the construction suggested by them is accepted, then no part of the notification becomes redundant, including the expression 'Kraft Paper'. Consequently, the only possible conclusion is that any unbleached varieties of paper satisfying the further conditions set out in the Notification regarding use of not less than 75% by weight of pulp made from Bagasse, would be exempt under the Notification.

5. The appellants have further submitted that the use of the expression 'varieties' is most significant. The expression employed is not unbleached variety of paper but unbleached varieties of paper. Consequently, full significance and emphasis has to be given to the deliberate use of plural in the notification by the Central Government. They contended that the lower authorities have totally failed to apply their mind to this aspect of the Notification.

6. They further contend that the lower authorities have been carried away by the name given