Customs, Excise and Gold Tribunal - Mumbai
Jewel Papers P. Ltd., Jewel Paper ... vs C.C.E. on 27 October, 2003
Equivalent citations: 2004(92)ECC292, 2004(166)ELT283(TRI-MUMBAI)
ORDER
C.N.B. Nair
1. The appellants are engaged in the manufacture of PolyCoated Paper and Paperboard which are liable to central excise duty under Chapter Heading 48. Appellants also availed themselves of modvat credit in respect of inputs. In the process of manufacture, waste and scrap arise. Part of the waste is the input itself i.e. paper. Some waste is of paper which had been coated. The question raised in these appeals is the dutiability of such waste, particularly since the appellants are availing themselves of modvat credit. While the waste products remain wholly exempt from duty under Notification Nos. 38/90 and 14/92 etc. under the impugned order it has been ordered that they will not be eligible to clear the goods since they had taken modvat credit.
2. The contention of the appellant is that taking of modvat credit on the inputs is no ground for denying exemption. Appellant has pointed out that Rule 57D of Modvat Rules specifically provides that credit of specified goods allowed in respect of any inputs shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse or by product arising during the manufacture of the final product or that the inputs have become waste in or in relation to the manufacture of the final product whether or not such waste, refuse or by-product is exempt from whole of the duty of excise leviable thereon, or is chargeable to NIL rate of duty or is not specified as a final product under Rule 57A.
3. The appellants have also relied on the following decisions of this Tribunal in support of their contention:
(a) C.C.E., Mumabi-I v. Garware Plastics & Polyester Ltd. - 2002 (148) ELT 753 (Tri-Mumbai)
(b) Anand Polyrotex v. C.C.E. - 1991 (56) ELT 537
(c) Finolex Cables Ltd. v. C.C.E. -- 1993 (65) ELT 60
(d) C.C.E., Chandigarh - Maxon India Ltd. - 1994 (72) ELT 483
(e) Hyderabad Industries Ltd. v. C.C.E., New Delhi -1994 (72) ELT 283.
(f) C.C.E. v. M.R.F. Ltd. - 1993 (65) ELT 540
(g) Metal Lamp Caps (India) Ltd. v. C.C.E., Bangalore - 1995 (75) ELT 177.
(h) C.C.E., Bombay-II v. Tarapur Cables (I) Ltd. - 1996 (85) ELT 125
(i) C.C.E., Rajkot v. Devi Enterprises - 1998 (97) ELT 126.
(j) C.C.E.., Allahabad v. Union Carbide India Ltd. - 1998 (99) ELT 629.
4. The benefit of notification is being denied merely on the ground that appellant had taken modvat credit on the inpute. Rule 57D specifically states that credit taken is not affected because of loss or waste of inputs on which credit is taken or for the reason that waste, refuse etc. are exempt. The case-law (2002 (148) ELT 753) cited by the appellants also makes it clear that eligibility for exemption under Notification No. 14/92 is not affected by the fact that modvat credit had been taken on inputs The impugned orders are not sustainable in the light of the above. They are accordingly, set aside and appeals are allowed. The appellants shall be entitled to consequential relief if any.
(Pronounced in open Court on 11.12.2003)