1. The present appeal dated 8-12-1979 as supplemented by a further communication dated 20-2-80 (originally filed as a revision application before Government and transferred to this Tribunal under Section 35-P of the Central Excise and Salt Act, 1944) has been filed by M/s. Shree Rayalaseema Paper Mills Ltd., Kurnool, who are engaged in the manufacture of varieties of paper including wrapping paper. The facts of the case are not in dispute but for a proper appreciation of the legal issues which flow from such facts, the same are briefly set out as hereunder :

2. When the appellants started production in their paper mill in April, 1979, the Assistant Collector of Central Excise, Kurnool vide his order dated 21-4-79 informed them that excise duty should be paid by them-(a) on wrapping paper produced by them prior to its use as wrapper for wrapping other varieties of paper, and (b) the value of such wrapping paper (including the duty element) should be added to the value of any other type of paper before the assessable value of such paper is determined. In other words, the Assistant Collector wanted the appellants to pay the central excise duty on the wrapping paper at two stages, viz., (1) when it was manufactured as wrapping paper and became dutiable under the appropriate item of the central excise Tariff and (2) when it was used as a wrapper for other varieties of paper which were cleared from the appellants' factory.

3. Aggrieved by this order of the Assistant Collector the appellants preferred an appeal before the Appellate Collector of Central Excise, who, vide his order dated 17-9-1979 confirmed the order of the Assistant Collector and rejected their appeal. It is against the Appellate Collector's order that the appellants are before us. It is also pertinent to add at this stage that while the proceedings before the Government were pending, the appellants moved the Andhra Pradesh High Court who passed a stay order vide writ petition No. 3097/80, dated 12-6-1980 and directed as follows;-

"The Government of India is directed to dispose of the revision preferred by the petitioner within two months from today. Meanwhile, the stay is made absolute on condition that the petitioner furnished bank guarantee towards excise duty on the Mill Wrapper paper produced by him at the time when the wrapper paper is removed from the godown to another godown for wrapping purposes to the satisfaction of the Assistant Collector of Central Excise, Kurnool. The writ petition is disposed of accordingly. No costs."

4. Shri L.M. Kaul who appeared for the appellants stated that :-

(i) the goods, namely, the wrapping paper were not cleared from the factory and, therefore, could not be subjected to duty till they were cleared along with the other types of paper for which the said wrapping paper had been used ;

(ii) the Assistant Collector of Central Excise at Rajahmundry had been following a procedure under which the value of the wrapping paper produced in the factory and the value of the writing paper/printing paper etc. are separately declared for the purpose of duty and charged to Central Excise duty at the appropriate rates when the said writing/printing paper is cleared from the factory ;

(iii) subjecting the wrapping paper to duty after its manufacture in the factory and again including the value thereof along with the duty paid at the time of final clearance of writing paper amounts to payment of excise duty twice on the same goods.

Shri Kaul referred to the recent judgment of the Andhra Pradesh High Court (Writ Petition No. 2055 of 1980-1983 ELT 86) whereby a similar issue was raised and disposed of by the Court. Shri Kaul stated that the Hon'ble High Court had ruled that the duty should be charged on wrapping paper only once and not twice i.e., once on its manufacture and for the second time when it was cleared along with writing or some other variety of paper for which it had been used for packing purposes.

5. Shri Mahesh Kumar appearing for th