H.R. Syiem, Member (T)

1. This appeal has been filed by Orient Paper Mills, Brajrajnagar, Orissa against the Order No. 5/OR of 1980 dated 31-3-80 of the Appellate Collector of Central Excise, Calcutta. The dispute is regarding a demand for 3,93,852.82 made by the Superintendent of Customs and Central Excise, O.P. Mills, Brajrajnagar by letter C. No. PR-4/OPM/78/ 1421 dated 9-9-78 in respect of wrapper paper said to have been cleared between 16-3-76 so 30-11-76 by O.P. Mills. This demand was endorsed by the Assistant Collector of Central Excise, Sambalpur who, by his order (original) No. 17/3/ 79/1 dated 4-5-79, ordered O.P. Mills to pay forthwith the demanded amount of Rs. 3,93,852.82. The dispute arose because from 16-3-76, duty on wrapper paper became leviable ad valorem. The Central Excise contend that the Mills should pay duty on its wrapper paper as wrapper paper before it is taken for use to wrap other papers in. The Mills reject this contention saying that they pay duty on the wrapper paper when it is finally removed from the factory after other papers are wrapped in it. The duty on the contents which are wrapped in the wrapper paper is calculated on the total value whic