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Central Excise - Interpretation of the words starting from the stage of
pulp in Notification Nos. 22/94-CE, 23/94-CE and 24/94-CE
Circular
No. 40 dated 6th June 1994
I
am directed to invite reference to Notification Nos. 22/94-CE, 23/94-CE and
24/94-CE all dated 1st March, 1994 prescribing concessional rates of
duty for paper and paperboard or articles made therefrom if these have been
manufactured, starting from the stage of pulp, in a factory, and such pulp
contains not less than 50%/75% of pulp made from unconventional raw materials.
2.
Doubts have been expressed regarding the interpretation of these
notifications with respect to the use of the words "starting from the stage
of pulp". One interpretation is that the concessional rates would not be
available unless the pulp used to manufacture the paper, paperboard, etc. is
also manufactured in the same factory. It is also viewed that the concessional
rates under these notifications would not be available if the factory uses
imported or bought out pulp.
3.
The matter has been examined. In notification Nos. 22/94-CE, 23/94-CE and
24/94-CE, the words "starting from the stage of pulp" only indicate
that the processes involved in converting pulp to paper and paperboard or
articles have to take place in the same factory from which these goods are
cleared. The primary aspect is that the same factory must process the specified
pulp to culminate in the manufacture of paper and paperboard or articles made
therefrom. Manufacturers claiming these exemptions have to establish that the
goods have been manufactured in the factory itself from pulp of the specified
composition. These notifications are not intended to apply only to those units,
which start from the raw materials to make pulp containing the specified
percentages of unconventional raw materials. However, independent converters of
paper and paperboard, etc. who do not process pulp are not covered under the
purview of these notifications at all.
4.
Accordingly, it is clarified that under notification Nos. 22/94-CE,
23/94-CE and 24/94-CE, the concession would be available to paper, paperboard,
etc. if manufactured from pulp of the required specification regardless of
whether the pulp itself is manufactured in the same factory or not.
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