2006 (3) TMI 484 - AT - Central Excise

Summary

Issues: Interpretation of Notification No. 42/90-C.E. (N.T.) under the Central Excise Act regarding exemption for synthetic tow.

Analysis:
The primary issue in this case revolves around the interpretation of Notification No. 42/90-C.E. (N.T.) under the Central Excise Act, specifically concerning the exemption for synthetic tow. The Revenue contended that the lower authorities erred in determining that the goods, synthetic tow, were not covered by the said notification. The notification exempts duty of excise on synthetic tow falling under Heading 55.01 of the Schedule to the Central Excise Tariff Act, 1985 and consumed in the manufacture of staple fibres and tops falling under the same heading. The period covered by the notification is from 28-2-1986 up to 31-5-1988. The demand raised against the respondent in this case falls within the period covered by the notification, from 1-5-1987 to 28-2-1988. Despite the Revenue's argument that tow first comes into existence before waste emerges, the Tribunal found that synthetic tow, once emerged, is used in the manufacture of staple fiber during which waste arises. Therefore, the goods in question, synthetic tow consumed in the manufacture of staple fiber, are deemed to be covered by Notification No. 42/90. Consequently, the Tribunal upheld the impugned order and dismissed the appeal, affirming that the goods indeed fall within the ambit of the notification, thus exempting them from duty of excise.