Custom, Excise & Service Tax Tribunal
Tetra Plastics Pvt. Ltd vs Nashik on 28 January, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. III APPEAL NO. E/1212/2007 (Arising out of Order-in-Appeal No: CEX/AKD/101/APLN/NSK/2007 dated 27/06/2007 passed by the Commissioner of Central Excise & Customs (Appeals), Nasik) For approval and signature: Hon'ble Ms. Jyoti Balasundaram, Vice President ======================================================
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
No
2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
No
3. Whether Their Lordships wish to see the fair copy of the Order? :
Seen
4. Whether Order is to be circulated to the Departmental authorities? :
Yes ====================================================== Tetra Plastics Pvt. Ltd.
...Appellant Vs Commissioner of Central Excise & Customs Nashik ...Respondent Appearance:
Shri Pradeep Korde, Consultant for the appellant Shri R. B. Tiwari, Authorized Representative (Jt.CDR) for the respondent CORAM:
Hon'ble Ms. Jyoti Balasundaram, Vice President Date of decision: 01/02/2008 ORDER NO....................................................
1. Duty demand of Rs. 2,20,761/- and penalty of equal amount has been confirmed against the appellants by the authorities below on a quantity of 21227.05 kgs., of polythene bags found to have been cleared without payment of duty. It is against such order of the Commissioner (Appeals) the above appeal has been filed.
2. I have heard both sides.
3. The demand has been confirmed by holding that the quantity of 21227.05 kgs of scrap shown in the balance sheet of the assessees, who were manufacturers of polythene bags / tubings as well as processing of materials on job work basis for M/s. IPCL, Vadodara under the provisions of erstwhile Rule 57F(4) and Rule 57AC(5) of Central Excise Rules, 1944, represented polythene bags rejected by M/s. IPCL, and not scrap as the percentage of scrap was very high. The allegation that what was shown as scrap in the balance sheet was actually finished goods rejected by M/s. IPCL was challenged by the assessee right from the stage of reply to the show cause notice. The assessee also contended that although M/s. IPCL had rejected certain quantity of polythene bags, the rejection was due to some defects which were of minor nature and which can be rectified and were actually rectified and subsequently bags were returned to M/s. IPCL. The adjudicating authority's finding that the percentage of scrap is very high for plastic industry cannot lead to the conclusion that the quantity shown as waste and scrap is nothing but the quantity of rejected finished goods. The fact that the assessee has not substantiated its contention of return of rejected polythene bags to M/s. IPCL after rectification is not sufficient to conclude that 21227.05 kgs., shown as scrap in the balance sheet is the quantity of finished goods rejected by M/s. IPCL and that in order to fulfill the conditions in the contract between the assessee and M/s. IPCL for supply of bags, required to use their own granules for replacement of rejected bags. The entire case of the department being based on assumption and presumption, the demand and penalty cannot be sustained.
4. Accordingly, I set aside the impugned order and allow the appeal with consequential relief, if any, due to the appellants in accordance with law.
(Pronounced in Court on 01/02/2008) (Ms. Jyoti Balasundaram) Vice President */as 3