2000 (12) TMI 313 - AT - Central Excise

Summary

Issues: Interpretation of Notification 14/92 regarding eligibility for benefit based on duty payment on waste material arising from goods under Chapter 39 or any other Chapter of the Schedule to the Central Excise Tariff Act, 1985.

Analysis:
1. The appeals challenged an order of the Commissioner (Appeals) concerning the eligibility for benefits under Notification 14/92 based on the duty payment on uncut Polyurethane foam block waste material. The Commissioner relied on a previous decision and concluded that no duty was paid on the waste material, thus denying the benefit of the notification.

2. The Tribunal considered the arguments presented by both parties. It was established that during the manufacturing process of Polyurethane foam, duty was paid on various items under the Central Excise Act or Customs Act. The waste material, parings, and scrap arising from the cutting of Polyurethane bread into blocks fell under Chapter heading 39.15, raising the question of eligibility under Notification 14/92.

3. The appellant argued that the waste material arose from an intermediary product, Polyurethane block, exempted from Central Excise duty under Notification 217/86. Referring to Board's instructions and a Supreme Court decision, the appellant contended that duty exemption on the intermediary product should be considered as duty already paid, meeting the conditions of Notification 14/92.

4. The Tribunal acknowledged the appellant's argument, emphasizing that the waste material could be considered to have originated from the duty-paid chemicals used in manufacturing the Polyurethane bread. The Tribunal found merit in the appellant's submission regarding the interpretation of "duty already paid" based on circulars issued by the Central Excise Board of Excise and Customs.

5. The Tribunal addressed the Revenue's reliance on a previous decision, which was distinguished in another case. The Tribunal followed the decision that held waste material arising from duty-paid Polyurethane bread eligible for benefits under Notification 14/92, emphasizing that the previous decision was not binding due to fresh facts presented in a subsequent case.

6. Consequently, the Tribunal set aside the impugned orders and allowed the appeals, ruling in favor of the appellant based on the interpretation of duty payment on waste material under Notification 14/92.