Taxes levied by the Union and collected and appropriated by the States are designed to generate revenue for the central government but are collected and used by the state governments. In this case, the correct answer is option 'D', which refers to taxes on newspapers.

Taxes on Newspapers:
- Taxes on newspapers are levied by the Union government, but they are collected and appropriated by the state governments.
- This means that the central government sets the tax rate for newspapers, but the revenue generated from this tax goes directly to the state governments.
- The state governments can then use this revenue for various purposes such as infrastructure development, welfare programs, and education.

Stamp Duties:
- Stamp duties are a type of tax levied on various legal documents, such as property transactions, agreements, and contracts.
- In most cases, stamp duties are levied and collected by the state governments.
- However, there are certain cases where stamp duties are levied and collected by the central government, such as in the case of bills of exchange and promissory notes.

Passenger and Goods Tax:
- Passenger and goods tax, also known as transportation tax, is a tax levied on the movement of passengers and goods.
- This tax is primarily levied and collected by the state governments.
- The revenue generated from this tax is used by the state governments to maintain and develop transportation infrastructure, such as roads, railways, and airports.

Estate Duty:
- Estate duty, also known as inheritance tax or estate tax, is a tax levied on the transfer of property or assets from a deceased person to their heirs.
- Estate duty was abolished in India in 1985, so it is no longer applicable.

In conclusion, among the taxes mentioned, only taxes on newspapers are levied by the Union government and collected and appropriated by the state governments. The other taxes mentioned are primarily levied and collected by the state governments.