D.C. Mandal, Member (T)

1. The issue to be decided in this case is whether 'gummed paper tapes' manufactured by the appellants were classifiable under Item 60 of the Central Excise Tariff as "adhesive tapes all sorts..." or under Tariff Item 17(2) ibid. In the Order-in-original dated 8-2-1982 passed by the Assistant Collector of Central Excise, Saharanpur, it is stated that gummed paper tapes have coatings of adhesives which are activated by application of solvent, for example water, and are being marketed and used in the form of tapes for the purpose of holding materials together and, therefore, these are classifiable under Tariff Item 60 and not under Item 17(2). In the appeal filed before the Appellate Collector of Central Excise, New Delhi, the appellants have stated that they received duty-paid Kraft paper in reels and gave it a coating of Glue Gum on one side only and dried it on drying machine and thereafter rolled it in the form of reels. The resultant was gummed paper which was slit into different widths ranging from 1/2 to 25" size and packed in reels. The Collector (Appeals) has upheld the decision of the Assistant Collector.

2. We have heard Shri H.P. Arora, Advocate for the appellants and Shri A.S. Sunder Rajan, JDR for the respondent. Shri Arora has argued that the appellants manufacture gummed paper which is exempt from central excise duty by virtue of notification issued under Rule 8(1) of the Central Excise Rules. No duty is charged on the gummed paper in rolls. According to the central excise authorities, after gummed paper is slit in the form of tapes, it attracts duty under Central Excise Tariff Item 60. The learned advocate have argued that slitting of gummed paper does not amount to manufacture. Slitted gummed paper tapes continue to remain gummed paper and as such, no duty can be charged on the tapes. He has argued that Supreme Court, in its judgment reported in 1980 (6) ELT - 343 (S.C.) in the case of Deputy Commissioner, Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers, and Bombay High Court, in its judgment reported in MANU/MH/0144/1980 : 1980 (6) ELT 696 (Bom.) in the case of Sandoz India Limited v. Union of India and Ors., held that every process was not manufacture and a mere change in physical form did not amount to manufacture. It was also held that a new and different article having a distinct name, character or use must emerge due to manufacturing process. The learned advocate has also relied on the judgment of Supreme Court in the case of Collector of Central Excise, Bombay-II v. Kiran Spinning Mills, Thane, reported in 1988 (16) ECR-115 (S.C), in which it was held that straightening and cutting of the running length of man-made fibre into shorter length is not 'Manufacture' under the Central Excise law as no new substance is brought into existence. He has also relied on Supreme Court decision, reported in 1988 (17) ECR-33 (S.C.) in the case of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Shiphy International, Alleppey, in which it was held that frog legs retained their original identity and were known as frog legs in the market even after cleaning and freezing. He has prayed that following the ratio of the judgments relied on by him, the appeal should be allowed and the tapes should be classified under Item 17(2) of the Central Excise Tariff.

3. Appearing for the respondent, Shri Sunder Rajan has argued that Item 60 of the Central Excise Tariff includes paper backed adhesive tapes. This specific entry covers the product manufactured by the appellants. He has argued that once a product falls within a specific entry of a Tariff Item, it should be charged to duty under that item and the question of manufacture becomes irrelevant. In support of his argument, Shri Sunder Rajan has relied on a decision of this Tribunal, reported in 1984 (16) ELT-339 (Tribunal) in the case of Hindustan Petroleum Corporation Ltd., Bombay v. Collector of Cust