Customs, Excise and Gold Tribunal - Delhi
C.C.E. vs Radhekrishna Plastic Industries Pvt. ... on 9 December, 1998
Equivalent citations: 1999(105)ELT449(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. This Revenue appeal arises from Order-in-Appeal dated 21-2-1991 passed by the Collector (Appeals), by which the Collector by applying the Trade Notice No. 61/90, dated 20th June, 1990 has held that the appellants are entitled to the benefit of Notification No. 53/88, dated 1-3-1988 in respect of waste and scrap. The Assistant Collector had confirmed the demand of Rs. 29,228.13 under the provisions of Rule 57-1 read with Section HA of the CESA, 1944. The assessee had stated that
(i) they manufacture all sorts of plastic sheets falling under Chapter Heading 39.20;
(ii) they availed Modvat from 27-2-1987;
(iii) they maintained complete account of scrap which has arisen from the raw material prior to the date of opting of Modvat and afterwards.
2. Therefore, such waste of plastic sheets cleared by them are exempted under Sr. No. 24 of the notification. The Assistant Collector did not accept the plea and held that such clearance of waste and scrap of plastic sheets without payment of duty was not covered by the notification. The learned Collector in the impugned order has held that they were covered by the notification which granted exemption to waste and scrap of plastics. He has also held that the notification does not contemplate denial of proportionate credit on the inputs contained in waste and scrap. He has also observed that Rule 57D also does not contemplate denial of Modvat credit on the ground that part of the input contained in any waste, refuse or by-product is exempted from the whole of the duty of excise leviable thereon or is charged to Nil rate of duty or is not specified as a final product under Rule 57A. He has also observed that Rule 57F(4) provides that waste shall be removed on payment of duty or destroyed in the presence of the proper officer. He has observed that clearance on payment of duty, includes clearance on nil rate of duty. Rule 57C is only to ensure that the final product, which is in the case of the assessees are plastic sheets, are not exempted from the duty or chargeable to nil rate of duty. Therefore, he has held that in the absence of any specific provision in Notification No. 53/88 for denial of nil duty for the waste and scrap, the benefit is required to be extended.
3. The Revenue is aggrieved with this order. It is stated that the asses-see is availing Modvat credit to utilise the same towards payment of duty on final product viz. Plastic Sheets. Plastic waste is one of the final products arising during the manufacturing process and is specifically listed in the Central Excise Tariff (39.15). Since they are clearing the final product at nil rate of duty under Notification No. 53/88, dated 1-3-1988, they are not eligible for Modvat credit availed in respect of inputs contained in the plastic waste in terms of Rule 57C. The provisions of Rule 57D are not applicable in this case as waste and scrap of plastic sheets is specifically classifiable under Heading 39.15 and which have been cleared at nil rate of duty.
4. The learned DR submits that the issue is identical to one heard on 21-7-1997 in the case of MRF Ltd. v. Collector of Central Excise, Goa in Appeal No. E/1042/92-C, in which the operative portion of the order allowing the appeal was pronounced in the open court.
5. We have carefully considered the submissions. We have already decided and held in the case of MRF Ltd. that the benefit of notification cannot be denied in respect of plastic waste as it has suffered duty. We have also applied the ratio of the Tribunal's earlier judgment rendered in the case of Metrosyl, Jesidih Industrial Area v. Collector of Central Excise, as reported in 1991 (53) E.L.T. 93. In view of these orders, there is no merit in the appeal and hence the appeal is rejected.
S.K. Bhatnagar, Vice President
6. With due respects to Hon'ble Member Judicial my views and orders are as follows :
I observe that in the present case the basic question involved is whether waste and scrap of plastic falling under Heading 3915.00 would be cleared duty free under Notification No. 53/88 and whether Modvat taken on the input could be availed of and need not be reversed in spite of such duty free clearance. In this connection, I find that I had passed a separate but concurring order in E/Appeal No. 1042/92-C (M/s. MRF Limited), referred to by the learned DR.
7. I may further mention that in the present case also the inputs were duty paid and were utilised in the manufacture of final product, namely, plastic sheets falling under Heading 39.20 and the waste arising in the process of manufacture fell under Tariff Heading 39.15 and was exempted under Notification No. 53/88 in view of Serial No. 24 in the Table annexed thereto and for the reasons mentioned in our earlier order in MRF Limited (E/Appeal No. 1042/92-C), Modvat also could not be denied as the situation as covered by Rule 57D(1). Hence following the ratio of my order in the case of MRF Limited (supra) the appeal is rejected in this case also.