Customs, Excise and Gold Tribunal - Delhi
Tirupati Foams Pvt. Ltd. vs Collector Of Central Excise on 25 May, 1993
Equivalent citations: 1994(72)ELT770(TRI-DEL)
ORDER S.D. Mohile, Member (T)
1. Both these appeals involve a common issue and have been heard and are being decided together. The issue involved is whether Topskin, Bottomskins, side skin and shreadings are leviable to nil rate of duty under Notification No. 53/88 as claimed by the appellants or are chargeable to duty at the rates prescribed under Notification No. 54/88 as held by the Appellate Authority. There is no dispute that these are waste parings and scrap of plastics arising out of uncut polyurethane foam block which are themselves exempted under Notification No. 217/86 dt. 2-4-1986 being inputs captively consumed for further manufacture of other dutiable goods. The main argument urged before the learned Appellate Authority and reiterated in the present appeal is that the impugned goods result from inputs on which appropriate duty has been paid at the time of importation and hence, they are eligible to the benefit of Notification No. 53/88 which exempts such waste material resulting from goods on which duty has been paid under Chapter 39 or under any other chapter of the Tariff. In the Misc. petition an additional ground has been raised that the expression "the duty of excise leviable thereon" used in Notification No. 53/88 also includes nil rate of duty as held by Patna High Court decision in the case of Tata Yodagawa Ltd. and Anotlier v. Union of India and Ors. reported in 1987 (32) E.L.T. 521 which was also followed in the case of I.E.L. Ltd. v. CCE, Bombay - reported in 1988 (35) E.L.T. 142 (T). The alternate plea taken on behalf of the appellants is that even if their plea for the benefit of Notification No. 53/88 were to be rejected they would be entitled to the benefit of concessional rate under Notification No. 54/88. During the hearing the learned Advocate Shri Udai Joshi assisted by Sh. Jitender Singh, advocate reiterated the arguments in the Appeal Memo and in the Misc. Petition.
2. Shri L.N. Murthy, learned JDR did not oppose the Misc. petition for inclusion of the additional grounds and reiterated the Order-in-Appeal.
3. Considered. It is not disputed that no duty is paid on the uncut polyurethane foam block from which the impugned waste material has arisen. If the plea of the appellant were to be accepted, Notification 54/88 will become redundant and hence such an interpretation is to be avoided.
4. This view is supported by the provisions of Notification No. 217/86 which exempts inputs captively consumed for further manufacture by including a proviso that "provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from whole of the duty of excise leviable thereon or is chargeable to nil rate of duty. Hence, the waste material under reference were to be held as covered under Notification No. 53/88 it gets excluded from Notification 217/88. On this view of the matter the plea taken in the Misc. petition is untenable.
5. The original argument taken before the learned appellate authority and reiterated in the present appeal that the impugned goods have been produced out of inputs on which the appropriate duty has been paid is also not accepted since the same is not in consonance with the scheme of the Central Excise Tariff. There is a difference between the raw materials from which any goods have been produced and the resultant goods themselves. The fact that the raw materials are duty paid would not lead to the conclusion that any duty has been paid on the resultant goods, namely, uncut polyurethane foam blocks and from which the impugned waste material has arisen. The position would have been different if there had been a positive levy of duty on such uncut polyurethane foam block themselves, as distinct from the duty paid on the materials going into the manufacture of such block. It is well settled that when there is an apparent conflict between two provisions then a harmonious interpretation which avoids one of them being rendered redundant has to be adopted. Hence, when Notification No. 53/88, 54/88 and 217/86 are read together the conclusion is inescapable that the waste tyres etc. resulting from uncut polyurethane foam block on which no duty has been paid are chargeable to duty under Notification No. 54/88 has been rightly held by the learned Appellate Authority. He has already modified the Order-in-original to the extent of allowing the benefit of concessional rate described under Notification No. 54/88, hence no further relief is warranted. The appeals are accordingly rejected and the Misc. petition also stands disposed of.