2004 (10) TMI 508 - AT - Central Excise

Summary

Issues Involved:
Appeal against order-in-appeal granting benefit of Notification No. 14/92 - Classification of scrap of polyurethane/parings - Admissibility of benefit of Notification No. 14/92 - Consequential demand - Denial of benefit of Notification No. 14/92 - Quantification of duty - Finality of issue regarding admissibility of Notification No. 14/92 - Fulfillment of conditions of the notification - De novo proceedings for quantification of duty - Challenge before higher forum - Grant of benefit of notification not an issue before adjudicating authority.

Analysis:

The appeal was filed by the Revenue against the order-in-appeal passed by the Commissioner (Appeals) granting the benefit of Notification No. 14/92 in relation to the impugned goods. The Revenue contended that three show cause notices were initially issued to the respondents, one of which was related to the classification of scrap of polyurethane/parings and the admissibility of the Notification No. 14/92 benefit. The adjudicating authority confirmed the demand after denying the benefit of the notification. Subsequent appeals and orders led to the Commissioner (Appeals) allowing the benefit of the notification and setting aside the demand.

The Revenue argued that the issue of admissibility of Notification No. 14/92 had attained finality with the Commissioner (Appeals) order dated 27-9-1994, and the matter before the adjudicating authority was solely about the quantification of duty. The respondents' appeal against the quantification of demand did not challenge the admissibility of the notification, making the impugned order unsustainable in granting the benefit that had already been finalized.

The respondents' advocate contended that they fulfilled the conditions of the notification and were entitled to its benefit. However, the Commissioner (Appeals) had previously ruled against the respondents regarding the benefit of the notification. The Commissioner (Appeals) emphasized the requirement of paying excise or countervailing duty on the plastic before claiming exemption on the waste, parings, or scrap under Notification No. 14/92.

The Commissioner (Appeals) remanded the matter for the quantification of duty, and subsequent proceedings were only for this purpose. The issue of denying the benefit of the notification had reached finality as there was no challenge by the respondents before a higher forum. The impugned order granting the benefit of the notification, which was not a subject before the adjudicating authority, was set aside, and the appeal was allowed based on the earlier order-in-appeal.

In conclusion, the judgment focused on the finality of the issue regarding the admissibility of Notification No. 14/92, the fulfillment of its conditions, and the limitation on challenging decisions before higher authorities. The detailed analysis highlighted the procedural aspects and legal interpretations leading to the setting aside of the impugned order and allowing the appeal against the grant of the notification benefit.