1999 (4) TMI 209 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification No. 48/89-C.E. regarding exemption from Excise duty for Kraft paper containing over 75% bagasse pulp.
- Calculation method for determining the percentage of bagasse pulp in Kraft paper.
- Allowable deductions for moistures, additives, and reel core weight in the paper.
- Discrepancy between the Revenue's calculation method and the Collector's decision.
- Evidence presented by the Revenue to challenge the deductions allowed by the Collector.

Interpretation of Notification No. 48/89-C.E.:
The case involved the interpretation of Notification No. 48/89-C.E., granting exemption from Excise duty to Kraft paper made from over 75% bagasse pulp. The Collector of Central Excise held that the Kraft Paper manufactured by the respondents contained more than 75% bagasse pulp, entitling them to the notification's benefits. The respondents had been availing the exemption under this notification, but a show cause notice was issued challenging their eligibility based on the percentage of bagasse pulp in the paper.

Calculation Method for Bagasse Pulp Percentage:
The Revenue contended that the respondents were using a reverse calculation method to show that the bagasse pulp content exceeded 75%. They argued that the percentage of bagasse should be determined based on pulp alone, as per Trade Notice No. 7/8 issued by the Central Excise Collectorate, Meerut. The Collector allowed deductions for moisture, additives, and reel core weight in the paper, arriving at a percentage exceeding 75% during the period covered by the Show Cause Notice.

Allowable Deductions and Discrepancies:
The Collector, in the impugned order, allowed 8% deductions for moistures, additives, and reel core weight in the paper to determine the percentage of bagasse pulp. The Revenue did not dispute the figures considered by the Collector or provide evidence to challenge the deductions. The Trade notice specified that the percentage of bagasse should be determined based on pulp alone, not including other additives in the weight of the paper.

Evidence and Decision:
The Revenue did not present any evidence to contest the deductions allowed by the Collector or the fact that the paper contained moisture, additives, and reel core weight. The Tribunal found no evidence on record to rebut the Collector's findings, leading to the rejection of the Revenue's appeal. The judgment emphasized the importance of following the prescribed calculation method and providing substantiated evidence to challenge such deductions in excise duty cases.

This detailed analysis of the legal judgment highlights the key issues, arguments, calculations, and the final decision made by the Appellate Tribunal CEGAT, New Delhi regarding the interpretation and application of Notification No. 48/89-C.E. in a case involving Kraft paper manufacturing and excise duty exemptions.