2014 (9) TMI 964 - AT - Central Excise

Duty demand - Demand relates to the polyester staple fibre manufactured from waste polyethylenene terephthalate (PET) bottles - Held that - Goods were manufactured by the appellants from plastic scrap and waste including waste PET bottles - Impugned goods were not classifiable under the Central Excise Tariff during the period up to 28th June 2010 and they were brought under the scope of the said chapter in view of the insertion of Chapter Note 1A in Chapter 54 with effect from 29-6-2010. Consequently, for the period up to 28th June 2010 the goods were not liable to Central Excise duty as has been held by the CESTAT in the case of G.P.L. Polyfils (2005 (1) TMI 375 - CESTAT, NEW DELHI). In this regard it is pertinent to note that the C.B.E. & C. vide Circular dated 29-6-2010 stated that the case of G.P.L Polyfils Ltd. would be relevant for the particular facts as in the said case and hence cannot be a binding precedent in other matters. - There is no doubt that the Tribunal s decisions have precedential value. It is also seen that the adjudicating authority while not following the said judgement has not quite distinguished the same and such an act (of not following the said order) is not in conformity with the requirement of judicial discipline inasmuch as the distinguishment has to be rational, logical and substantive enough to take away the precedential value of the judgement and the adjudicating authority s attempt at distinguishing the CESTAT order falls abysmally short of that requirement. - Decided in favour of assessee.

Issues:
1. Early hearing of appeals due to retrospective amendment by Section 110 of Finance Act, 2014.
2. Duty demand on polyester staple fibre manufactured from waste PET bottles.
3. Classification and liability of goods under Central Excise Tariff.
4. Precedential value of CESTAT decisions and judicial discipline.

Issue 1: Early Hearing of Appeals
The appellants filed Misc. applications for early hearing due to the retrospective amendment by Section 110 of Finance Act, 2014, which made the impugned duty no longer leviable for the period 29-6-2010 to 16-3-2012. The appellants had already deposited a substantial amount of duty and were facing financial difficulties. With the consent of the ld. A.R., the requirement of pre-deposit was waived, and the appeals against Orders-in-Original confirming duty demand on polyester staple fibre were taken up.

Issue 2: Duty Demand on Polyester Staple Fibre
The impugned demand related to polyester staple fibre manufactured from waste PET bottles. The retrospective amendment under Section 110 of Finance Act, 2014 made the duty demand for the period 29-6-2010 to 16-3-2012 not applicable as the rate of duty on such fibre was made Nil. The impugned goods were exempted from duty with effect from 17-3-2012.

Issue 3: Classification and Liability of Goods
The goods were not classifiable under the Central Excise Tariff up to 28th June 2010, and they were brought under the scope of the tariff with the insertion of Chapter Note 1A in Chapter 54 from 29-6-2010. The CESTAT had previously held that the goods were not liable to Central Excise duty before 28th June 2010. The Tribunal's decisions have precedential value, and the adjudicating authority's failure to follow the CESTAT order was deemed to lack judicial discipline.

Issue 4: Precedential Value of CESTAT Decisions
The C.B.E. & C. had previously stated that the case of G.P.L. Polyfils Ltd. would not be a binding precedent in other matters, but this observation was struck down by the Delhi High Court. The Tribunal's decisions were considered to have precedential value, and the adjudicating authority's attempt to distinguish the CESTAT order was found to fall short of the requirement of judicial discipline.

In conclusion, the appeals were allowed, and the impugned orders confirming duty demand on polyester staple fibre were set aside based on the retrospective amendment and the classification of goods under the Central Excise Tariff.

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