Per Shri V.P. Gulati :

The appeals involve a common issue and are, therefore, taken-up together for disposal. The issue in the appeals relates to the classification of Electro Cardiograph recording paper. The product in question is in rolled form i.e. a paper which is rolled over the central reel which is in the nature of a hallow tube. The learned lower appellate authority had held the goods to be classifiable under Tariff Heading 4823.19 as against the classification under Tariff Heading 4823.90 held by the original authority. The learned original authority while holding it so, has taken note of the manufacturing process of these rolls in question and in para 7 of the original authority's order the position is set out as under:

7. In view of the above discussions, it is felt that the base paper (Ch. Hdg. 48.02) becomes a coated paper in rolls in the intermediate stage (4810.10). Even after the graphical printings on this paper, it does not alter its classification as a converted type of paper (coated paper) under 4810.10. Thus, the processes of wet conversions imparted on the base paper, produces an improved grade of paper, at the intermediate stage. The converted type of paper, thus produced becomes the input for a finished paper article. This has been achieved by the processes of cutting and slitting to the required lengths and widths. The final ECG Paper are meant for specific use on specific ECG machines. The process of cutting and slitting imparted on the converted jumbo rolls transforms and manipulate. He said jumbo rolls to a commercially recognisable ECG paper roll. It is reiterated that while the width of the original input papers ranges from 43 cms to 77.5 cms, the width of the end product, viz. the ECG paper ranges from 45 mm to 63 mm.

The sample invoices for the sale of the said ECG paper and the relevant Purchase orders are placed at Pages 33-408. Thus it is emphasised that the processes of slitting and cutting are not indiscriminate, but are measured to specific size and requirements so as to find its perfect use to the ECG machine in which the same are to be employed with. Thus a commercially recognisable product, an article of paper, which is cut to size emerges. This is squarely covered under Heading 4823.90 on merit, considering the marketability and also the specific entry in the Tariff.

2. The learned lower authority has taken note of a Tariff Advice which held the ground till 1.3.94. The Tariff Advice as abstracted in the learned lower authority's order is reproduced below :

"Paper and paper board"

"A question has been raised as to whether ECG paper and Barospeedograph paper can be considered as converted papers obtained by one side being subjected to printing of colour, with or without design, attracting nil rate of duty under S.No. 3 (ii) of Table annexed to notification No. 68/76 dated 16.3.76.

"2. According to the information available with the Board, the ECG paper is made from duty paid base paper. All processing on the base paper is done on one side only with the help of an electrically operated machine. A black dye in suitable water proofing medium is applied twice. This side is then given a heat sensitive plastic coating of cellulose acetate. The paper rolls after curing are processed in petrol and cut in proper width. A graph is then printed on the paper. Thereafter the paper is cut into proper marketable length. The process of manufacture is more or less similar for Barospeedograph paper except that the coating mixture is different and no graph is printed on the paper.

"3. Samples of these two types of paper were examined by Chemical Examiner, Central Revenues Control Laboratory, New Delhi. In regard to a sample of ECG paper he has stated that it is a strip of paper with graph lines printed on one side, the other side being plain. The surface on which the graph lines are printed is coated with a thin layer of cellulosic plastic material and the coating is a black varnished surface. In regard to