K. Venkataswami, J. - (1.) This appeal by the Revenue is preferred against an order dated 19-4-88 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as 'the Tribunal').
(2.) The question that arises for consideration is whether the duty of excise is not leviable under the provisions of the Central Excise Act on the quantities of single ply straw board manufactured and cleared without payment of duty for manufacture of multiple ply straw board/straw board of higher D. G. in the same factory of production.
(3.) Briefly stated, the facts are the following:- The respondents are the manufacturers of paper boards falling under T. I. 17 of the Central Excise Tariff. They manufactured single ply straw boards and a major portion of the single ply boards was cleared on payment of duty at the factory gate. A portion of the single ply boards was used in the manufacture of multiple ply straw boards within the factory of production and the multiple ply straw boards are removed from the factory after payment of duty. A show-cause notice was issued by the Revenue calling upon the respondent why the duty should not be levied on single ply straw boards used for the manufacture of multiple ply boards within the factory. The period for which the payment was demanded was from 20-2-83 to 22-7-83. The respondent replied to the show-cause notice denying the liabi-lity and the Assistant Collector, after perusing the reply, found that there was no essential difference in identity between the original commodity, namely, single ply straw board, and the processed article, namely, multiple ply straw board and the mere joining of two or three single ply straw boards by means of an adhesive would not necessarily lead to a conclusion that a commercially different and distinct commodity came into existence. The Assistant Collector also gave other reasons to come to the conclusion that the single ply straw board cleared for manufacture of multiple ply straw board in the same factory cannot be subjected to the duty of excise. Accordingly, by his order dated 6-2-84 he dropped all further proceedings initiated against the respondent pursuant to the show-cause notice issued for the period mentioned above.;