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104 EXCISE LAW TIMES [ Vol. 372

12. At the outset, we may point out that the assessee is one of the down-
stream producers. The assessee buys duty-paid jumbo rolls from M/s. El-
lora Paper Mills and M/s. Padamjee Paper Mills. There are different types
of papers namely, tissue paper, craft paper, thermal paper, writing paper,
newsprints, filter paper etc. The tissue paper is the base paper which is not
subjected to any treatment. The jumbo rolls of such tissue papers are
bought by the assessee, which undergoes the process of unwinding, cut-
ting/slitting and packing. It is important to note that the characteristics of
the tissue paper are its texture, moisture absorption, feel etc. In other
words, the characteristics of table napkins, facial tissues and toilet rolls in
terms of texture, moisture absorption capacity, feel etc. are the same as the
tissue paper in the jumbo rolls. The said jumbo rolls cannot be conveniently
used for household or for sanitary purposes. Therefore, for the sake of con-
venience, the said jumbo rolls are required to be cut into various shapes
and sizes so that it can be conveniently used as table napkins, facial tissues,
toilet rolls etc. However, the end-use of the tissue paper in the jumbo rolls
and the end-use of the toilet rolls, the table napkins and the facial tissues
remains the same, namely, for household or sanitary use. The predominant
test in such a case is whether the characteristics of the tissue paper in the
jumbo roil enumerated above is different from the characteristics of the tis-
sue paper in the form of table napkin, toilet roll and facial tissue. In the pre-
sent case, the Tribunal was right in holding that the characteristics of the
tissue paper in the jumbo roil are not different from the characteristics of
the tissue paper, after slitting and cutting, in the table napkins, in the toilet
rolls and in the facial tissues.
13. In the case of Brakes India Ltd. v. Supdt. of Central Excise & Others re-
ported in [(1997) 10 SCC 717], this Court has very aptly brought out the test
of character or end-use by observing as follows :
“If by a process, a change is effected in a product, which was not
there previously, and which change facilitates the utility of the
product for which it is meant, then the process is not a simple pro-
cess, but a process incidental or ancillary to the completion of a
manufactured product. It will not be safe solely to go by a test as to
whether the commodity after the change takes in a new name,
though in stated circumstances, it may be useful to resort to it. This
may prove to be deceptive sometimes, for it will suit the manufac-
turer to retain the same name to the end product also. The ‘charac-
ter or use’ test has been given due importance by pronouncements
of the Supreme Court. When adopting a particular process, if a
transformation takes place, which makes the product have a charac-
ter and use of its own, which it did not bear earlier then the process
would amount to manufacture under Section 2(f) irrespective of the
fact whether there has been a single process or have been several
processes.”
14. Applying the above tests, we hold that no new product had emerged
on winding, cutting/slitting and packing. The character and the end-use
did not undergo any change on account of the above-mentioned activities
and, therefore, there was no manufacture on first principles.
25. Further in the case of A.D. Steel Syndicate (supra) wherein this Tri-
bunal has held as under :-

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