2017 (1) TMI 1309 - AT - Central Excise

Benefit of exemption under serial No.73 of N/N. 6/2002-Central Excise dated 1.3.21002 as amended - import of Druid grade of copper scrap as raw material declared as copper scrap Druid as per ISRI - clearance of PVC granules - Held that - The respondent have been manufacturing the said items out of scrap/waste generated from copper wire/cable which fall under Chapter 85 (Central Excise Tariff i.e Tariff Headings 85.44/85.46/85.47) of the First Schedule to the Central Excise Tariff Act, 1985 - As per ISRI (Institute of Scrap Recycling Industry, INC, Washington) , it has been explained that copper scrap druid is a waste/scrap material of copper wire/cables having various types of insulations including plastic and therefore, the same falls under Chapter 85 (Tariff Headings 85.44/85.46/85.47) of Central Excise Tariff). If it is so, then there is no discrepancy or anomaly in the impugned order passed by the Commissioner (Appeals) - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against Order-in-appeal No.143/2008 dated 28.3.2008
- Duty of central excise, interest, and penalty imposition
- Exemption under serial No.73 of Notification No.6/2002-Central Excise
- Manufacturing recycled PVC granules
- Benefit of Notification No.6/2002-Central Excise for the Respondent
- Interpretation of ISRI specification for copper scrap Druid
- Chapter 39.04 to 39.14 goods manufacturing by the Respondent
- Chapter 85 goods generated from copper wire/cable
- Discrepancy in the impugned order passed by the Commissioner (Appeals)

Analysis:

The appeal in this case was made against the Order-in-appeal No.143/2008 dated 28.3.2008, where the duty of central excise amounting to ?39,59,061/- along with interest and equivalent penalty was confirmed on the Respondent-assessee. The impugned order set aside the Order-in-Original dated 15.6.2007 passed by the Additional Commissioner of Central Excise and Customs, Daman. The Respondent claimed exemption under serial No.73 of Notification No.6/2002-Central Excise for manufacturing recycled PVC granules. A show cause notice was issued stating that the exemption was not available, leading to duty demand confirmation by the Revenue authority.

Upon careful consideration, it was found that the Respondent was entitled to the benefit of Notification No.6/2002-Central Excise as per serial No.73, which allowed for the reprocessing of plastic materials out of scrap or waste of specific goods falling under various chapters. The Respondent's manufacturing of recycled PVC granules fell under the relevant chapters, and the ISRI specification clarified that copper scrap Druid, used by the Respondent, was indeed a waste/scrap material of copper wire/cables with insulations including plastic, falling under the appropriate tariff headings.

As the Respondent's activities aligned with the conditions specified in the notification, the impugned order passed by the Commissioner (Appeals) was upheld, and the appeal by the Revenue was rejected. The judgment highlighted the correct interpretation of the relevant notification and the classification of goods involved in the manufacturing process, ultimately resolving the dispute in favor of the Respondent.