1998 (5) TMI 217 - AT - Central Excise

Summary

Issues:
Dutiability of plastic scrap retained by the respondent under Notification No. 53/88 C.E., validity of classification list, benefit of exemption notification, Modvat credit on inputs, dutiability of cable scrap, appeal by the revenue, factual error in lower appellate authority's decision, shifting stand of revenue, plea advanced by respondents, Modvat credit on inputs affecting dutiability of cable scrap.

Analysis:

The case involved a dispute regarding the dutiability of plastic scrap retained by the respondent under Notification No. 53/88 C.E. The respondent obtained cable scrap from a telecom cable manufacturer and separated plastic and copper scrap from it. The original authority denied exemption claiming the cable scrap was not duty paid due to Modvat credit on inputs. The authority imposed 40% duty on the plastic scrap. In appeal, the lower appellate authority granted the benefit of the notification, citing that the input contents of the cable scrap were duty paid, as the supplier availed Modvat credit. The revenue appealed, arguing that the cable scrap was not duty paid, thus not fulfilling the condition for exemption under Sl. No. 24 of the notification.

The revenue contended that the lower appellate authority erred in considering the cable scrap as duty paid, referencing a Tribunal case. The revenue argued that since the cable scrap was not dutiable, the plastic scrap should fall under a different classification. The respondent's advocate highlighted that the revenue's new argument contradicted earlier allegations and should not be considered at this stage. The Tribunal acknowledged the shifting stand of the revenue and rejected the new argument, upholding the lower appellate authority's decision.

Regarding the Modvat credit on inputs affecting the dutiability of cable scrap, the Tribunal agreed with the lower appellate authority's reasoning that the issue had been adequately addressed. The Tribunal found no merit in the revenue's appeal and dismissed it. The judgment emphasized the importance of consistency in arguments presented at different stages of the case and upheld the lower appellate authority's decision regarding the dutiability of the plastic scrap under the exemption notification.