Susanta Chatterji, J. - (1.) The present Rule was obtained by the writ petitioner challenging the Order No. V(30)-5-SBP-C.EX.-78/2629 dated February 15,1978 and the order dated October 7,1980 in Appeal No. 82/OR 1980 passed by the Assistant Collector of Central Excise, Sambalpur and to restrain the respondents from levying any duty on wrapping paper at the stage of its being taken for packing other varieties of papers and/or in the alternative to allow proforma credit in respect of duty paid on the wrapping paper at the earliest stage on being taken for packing other varieties of paper under Rule 56A of Central Excise Rules.
(2.) It is stated that the petitioner carries on the business of manufacturing paper and paper board. The petitioner is alleged to be duly licensed under the provisions of the Central Excises and Salt Act and/or the Central Excise Rules, 1944. It is further stated that different types of papers are subjected to different rates of duty under the Act. A part of the packing and wrapping paper produced at the petitioner's said factory used to be and is still utilized in packing other varieties of papers manufactured at the said factory. It is claimed that with effect from March 16, 1976 the duty under the Act on paper was made ad valorem. Section 4 of the Act provided for computation of the assessable value of the goods where duty is leviable thereon ad valorem. It is also claimed that the petitioner made an application to the Assistant Collector of Central Excise by letter dated January 26,1978 for long day to avail the benefit or for proforma credit under rule 56A of the Rules. The Assistant Collector of Central Excise, Sambalpur however, refused to accede to the request and against the decision communicated by letter dated February 15,1978 the petitioner preferred an appeal before the Appellate Collector of Central Excise, Calcutta. By an order October 7,1980 the Appellate Collector of Central Excise rejected the said appeal of the petitioner. Being aggrieved the petitioner has moved the writ Court to seek reliefs. It is further placed on record that during the pendency of the said appeal before the Appellate Collector of Central Excise against the order dated Fabruary 15, 1978 of the Assistant Collector, by Notification bearing No. 118/80-CE dated July 17,1980 an explanation was inserted after the third proviso to Sub-rule (2) of Rule 56A to the effect that for the purposes of the said Rule material or component parts would include material part which was produced or manufactured in the manufacturers' factory. The petitioner, however, made a fresh application on August 5,1980 and the same is alleged to be still pending for disposal.
(3.) Stating all these facts in details, the petitioner has come to this writ Court on the ground that the wrapping paper is sold by the petitioner and it is clear along with paper content. No duty in respect of such wrapping paper can be charged at the stage of their being removed for packing other varieties of papers. The duty can only be charged along with paper contents when the goods are cleared from the factory premises. As the wrapping paper at the time of its being used for packing and other varieties of paper is not removed from the licenced premises, no duty can be levied under the Act and the Rules at this stage. The grievance of the petitioner is that the action of the respondents in levying the duty prior to the removal of the goods from the manufacturing premises is contrary to the law and no duty can be levied from wrapping paper used for such captive consumption.;