1999 (4) TMI 263 - AT - Central Excise

Summary

Issues: Classification of waste arising during the manufacture of polypropylene tapes and fabrics for duty liability.

Analysis:
1. The respondent, engaged in the export of polypropylene tapes, fabrics, and woven sacks, faced a duty recovery notice for clearing waste without payment. The respondent claimed exemption under Notification 243/79 and argued that the waste was not liable to duty, citing a Tribunal decision. The Assistant Collector rejected these contentions and confirmed the duty demand.

2. On appeal, the Collector (Appeals) found the products exempted under Notification 243/79 and clarified the correct classification under Chapter 39 instead of Chapter 54. The appeal was allowed, setting aside the impugned order, leading to the current appeal.

3. The Tribunal noted that the Commissioner's decision on classification was not within the scope of the proceedings. The waste arising during the manufacture of polypropylene tapes was exempted under the notification, but not for the subsequent stage of fabric manufacture, making duty payable on that waste.

4. Referring to a previous Tribunal decision, it was established that certain wastes were not liable to duty due to the absence of specific tariff entries. However, waste arising in the manufacture of sacks was found liable to duty under Heading 5401.90, even though the fabric itself had nil duty under Heading 5408. The appeal was partially allowed, and the duty payable was to be quantified by the Assistant Commissioner for the respondent.