2018 (5) TMI 1399 - AT - Central Excise

Concessional rate of duty - Benefit of N/N. 6/2002-CE dt.1.3.2002 as amended by N/N. 48/2004- CE dt.10.9.2004 - Applicability of case of M/s.Shreyans Industries Ltd. vs. CCE, Ludhiana 2008 (5) TMI 389 - CESTAT, NEW DELHI to the facts of present case - Held that - it cannot be alleged that the Commissioner has not verified the facts of the case and the facts of the case are not in dispute - the Commissioner has rightly relied upon the decision of this Tribunal in the case of M/s.Shreyans Industries Ltd. vs. CCE, Ludhiana 2008 (5) TMI 389 - CESTAT, NEW DELHI , where Central Pulp & Paper Research Institute and IIT, Roar in their separate opinion have opined that the appellant s plant appears to be suitable for pulping agricultural residues - unit of the appellants are eligible for the benefit of exemption. As the facts of this case are similar to the facts of M/s.Shreyans Industries Ltd., therefore, the respondent are entitled to avail concessional rate of duty under entry No.86A of the N/N. 6/2002-CE as amended by N/N. 48/2004-CE dated 10.9.2004. Appeal dismissed - decided against Revenue.

Issues:
- Eligibility for concessional rate of duty under specific notifications
- Verification of facts and technical expert opinions
- Interpretation of plant suitability for making wood pulp
- Applicability of previous tribunal and Supreme Court judgments

Analysis:

Eligibility for concessional rate of duty under specific notifications:
The case involved a dispute regarding the eligibility of the respondent for availing concessional rate of duty under specific notifications related to the clearance of printing and writing paper. The respondent had cleared goods on short payment of duty by wrongly availing the concessional rate of duty under certain entries of notifications. The Revenue contended that the respondent did not fulfill the conditions specified in the notifications, leading to the issuance of a show cause notice to demand duty. The Commissioner initially allowed the benefit of exemption notification, but the Revenue appealed against this decision. The Tribunal analyzed the facts and submissions, ultimately concluding that the respondent was indeed eligible for the benefit of exemption under the relevant notifications.

Verification of facts and technical expert opinions:
During the investigation, statements were recorded from the respondent's manager, clarifying the usage of wood chips and other raw materials in the manufacturing process. The Revenue alleged that the Commissioner did not adequately verify the facts regarding the plant's capability to make wood pulp. However, the Tribunal found that the facts were not in dispute, as confirmed by the manager's statement. The Tribunal also considered technical expert opinions from institutions like the Central Pulp & Paper Research Institute and IIT, Roorkee, which highlighted the suitability of the plant for pulping agricultural residues rather than wood or bamboo. These expert opinions played a crucial role in determining the plant's actual capabilities.

Interpretation of plant suitability for making wood pulp:
The Tribunal delved into the technical aspects of the manufacturing process, examining the raw materials used, the machinery present in the units, and expert opinions regarding the suitability for wood pulp production. The Tribunal emphasized that the absence of specific machinery like wood chipping and debarking units indicated that the plants were not designed for making wood pulp. Expert opinions highlighted that the plants were more aligned with processing agricultural residues rather than woody materials. The Tribunal referenced previous judgments to support the interpretation that the plants must be specifically designed and used for making wood or bamboo pulp to qualify for certain exemptions.

Applicability of previous tribunal and Supreme Court judgments:
In considering the applicability of previous judgments, the Tribunal referred to cases like M/s.Shreyans Industries Ltd. and Central Pulp Mills to draw parallels and establish consistency in legal interpretations. The Tribunal found similarities between the facts of the present case and the precedents, leading to the decision that the respondent was entitled to the concessional rate of duty under the relevant notifications. By aligning with previous tribunal and Supreme Court decisions, the Tribunal reinforced the legal principles governing the eligibility for duty exemptions based on the nature of the manufacturing plant and processes.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the impugned order that granted the respondent the benefit of the concessional rate of duty under the specific notifications. The detailed analysis of technical aspects, expert opinions, and legal precedents formed the basis for the Tribunal's decision, ensuring a thorough examination of the eligibility criteria and factual verifications in the case.

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