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2018 (6) TMI 868 - AT - Central ExciseDutiability on Waste - benefit of N/N. 6/2006 CE dt. 01.03.2006 - demand of duty on plastic waste contained in plastic granules and HDPE/ PP Ropes - Held that - The issue involved is squarely covered by the Tribunal order in case of M/s Bommilda Filaments Ltd. 2007 (9) TMI 140 - CESTAT, BANGALORE , where it was held that Exemption to Plastic ropes under N/N. 6/02 cannot be denied by saying that intermediate products are exempt from duty. There is no dispute that duty paid granules were used in manufacture and therefore the ratio of the judgment of Tribunal would apply to the present case - In case of plastic granules manufactured by the Appellant from waste plastic, the same is exempted from duty and there is no condition in terms of serial No. 73 of the N/N. 6/2006 CE dt. 01.03.2006 that the waste should be duty paid. Extended period of limitation - Held that - The issue involved is of interpretation and therefore the demands made by invoking extended period of limitation are not sustainable. Appeal allowed - decided in favor of appellant.
Issues:
1. Exemption from payment of duty on HDPE/PP Ropes in terms of Notification No. 6/2006 - CE dated 01.03.2006. 2. Demand for duty on tapes, yarn, and plastic waste contained in plastic granules. 3. Verification of cenvat credit of inputs. 4. Imposition of penalties under section 11AC and Rule 26. 5. Interpretation of conditions for exemption under Notification No. 6/2002. 6. Time bar for demanding duty beyond the normal period. Detailed Analysis: Issue 1: The Appellants filed appeals against the Order-in-Appeal passed by the Commissioner (Appeals), Central Excise, Pune, regarding exemption from duty on HDPE/PP Ropes as per Notification No. 6/2006 - CE. The demand was confirmed initially, but the Commissioner (Appeals) allowed cenvat credit of inputs. The Tribunal remanded the case back to the original authority for reconsideration. The adjudicating authority confirmed the demand but allowed cenvat credit subject to verification. Issue 2: The demand for duty on tapes, yarn, and plastic waste contained in plastic granules was a key point of contention. The Tribunal's judgment cited relevant case law and circulars to determine that the duty paid granules were used in manufacturing, making the demands unsustainable. The issue was of interpretation, and demands made beyond the normal period were deemed not sustainable. Issue 3: The verification of cenvat credit of inputs was crucial in the case. The Tribunal's decision highlighted that the duty paid granules were used in manufacturing, leading to the allowance of exemption under Notification No. 6/2002. The demands and penalties imposed were found not sustainable, and the appeals were allowed. Issue 4: Penalties under section 11AC and Rule 26 were imposed by the adjudicating authority. However, the Tribunal found the demands and penalties not sustainable based on the interpretation of exemption conditions and the use of duty paid raw materials in manufacturing. Issue 5: The interpretation of conditions for exemption under Notification No. 6/2002 was extensively discussed in the judgment. The Tribunal's analysis of relevant circulars and case law supported the Appellants' claim for exemption based on the use of duty paid granules in manufacturing processes. Issue 6: The time bar for demanding duty beyond the normal period was a significant aspect of the case. The Tribunal concluded that demands made by invoking extended periods of limitation were not sustainable due to the interpretation of exemption conditions and the use of duty paid raw materials in manufacturing. In conclusion, the Tribunal's detailed analysis of the issues involved led to the setting aside of the impugned order and the allowance of all appeals based on the use of duty paid granules in manufacturing processes and the interpretation of exemption conditions.
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