- (1.) The appellant (hereinafter referred to as the "assessee") is a paper mill which is engaged, inter alia, in the manufacture of paper. For the manufacture of paper, the assessee uses various conventional raw materials and also non-conventional raw materials, namely, waste gunny bags, jute waste etc. The assessee is exigible to Central Excise on the aforesaid product, namely, paper manufactured by it, which the assessee has been paying to the respondent (hereinafter referred to as the "Revenue") from time to time. In order to encourage production of paper by use of non- conventional raw material, the Government of India issued Notification No. 22/94-CE dated 01.03.1994 which assures concessional rate of duty at 5% for "paper and paperboard or articles made from non-conventional material". The condition which is contained in the said Notification that needs to be fulfilled in order to avail the benefit thereof to pay the concessional rate of duty reads as under: "If such paper and paperboard or articles made therefrom have been manufactured, starting from the stage of pulp, in a factory, and such pulp contains not less than 75 per cent by weight of pulp made from materials other than bamboo, hard woods, soft woods, reeds (other than sarkanda) or rags."
(2.) As per the aforesaid Notification, following conditions are to be satisfied in order to avail the benefit: (i) Manufacture of paper and paperboard or articles made therefrom should start from stage of pulp, in a factory, (ii) Such pulp should contain not less than 75% by weight of pulp made from materials other than bamboo, hard woods, soft woods, reeds (other than sarkanda) or rags. It, thus, specifies certain materials which are excluded from the Notification, meaning thereby, if the pulp is made from those specific materials, namely, bamboo hard woods, soft woods, reeds (other than sarkanda) or rags then the manufacturer would not be entitled to the benefit of this Notification.
(3.) The assessee herein is manufacturing paper out of pulp of waste gunny bags/jute waste and on the manufacture of paper from the pulp of the aforesaid waste, the assessee wants to pay concessional rate of excise duty as its contention is that pulp of waste gunny bags or jute waste does not fall in any of the materials mentioned in the Notification. The Revenue, on the other hand, has taken the position that the pulp of waste gunny bags/jute waste is nothing but pulp of 'rags' and since the Notification, particularly, disentitles the benefit thereof if the pulp is made from rags, the assessee is not covered by the said Notification. The question, therefore, that falls for consideration is as to whether pulp of waste gunny bags/jute waste is to be treated as the pulp made from the material 'rags'. Before we answer this question, it is deemed necessary to take note of the other related Notifications touching upon the subject matter as well as history of the present litigation which has lauded the matter to this Court.;