2005 (9) TMI 364 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 14/92 regarding exemption for finished goods.
2. Applicability of Modvat credit on inputs to determine duty payment status.

Analysis:
Issue 1: The Department appealed against the Order dated 30-10-2003 by the Commissioner of Central Excise (Appeals), Mumbai, concerning a Show Cause-cum-Demand Notice issued to M/s. Star Plastics for Rs. 60,117.45 on plastic waste and scrap cleared during October 1993 to February 1994. The Department argued that Notification No. 14/92 exemption did not apply, citing a case precedent. However, the appellants contended that since they availed Modvat credit on the inputs, the inputs were duty paid, not exempted. They referenced a case where taking Modvat credit did not render inputs non-duty paid. The Tribunal found in favor of the assessee, citing multiple decisions supporting the proposition, leading to the dismissal of the Revenue appeal.

Issue 2: The Department's main contention was the inapplicability of Notification No. 14/92 exemption. The appellants argued that availing Modvat credit on the inputs indicated duty payment status, not exemption. They referenced a case where the benefit of the notification was upheld despite taking Modvat credit. The Tribunal noted that the dutiability of waste arising from goods without Modvat credit availed allowed for the benefit of Notification 14/92-C.E. The Tribunal found in favor of the assessee based on the cited decisions, resulting in the dismissal of the Revenue appeal.