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TMI Blog2008 (5) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred to as appellant No. 2) against order-in-Original No. O1/LDH/06 dated 8-2-06 passed by the same adjudicating authority. These units manufacture Printing Writing Paper mainly from agro residues i.e. wheat/rice straw, ba gasse, Kahi, jute caddy sarkanda etc. The Commissioner by the above mentioned two orders denied the benefit of exemption under Notification No. 6/02-C.E. dated 1-3-02, as amended by Notification No. 48/04 dated 10-9-04 (S. No. 86A read with Condition No. 14A) and confirmed the demand of duty amounting to Ks. 2,90,04,145/- against the appellant No. 1 and duty demand amounting to Ks. 2,22,52,632/- against appellant No. 2, alongwith interest on the duty at the applicable rate under Section 1 lAB and also imposed penalty on them under Rule 25(1) of Central Excise Rules, 2002. 2 Notification No 6/02-C E, dated 1-3-02 as amended by Notification No 48/04-C E, dated 10-9-04 (S No 86A) pr a concessional rate of duty at 12% ad valorem on 'paper and paperboard or articles made therefrom' manufactured, starting from the stage of pulp, in a factory, and such pulp contains not less than 75% by weight of pulp made from materials other than bamboo, hard woods, soft w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery for debarking, chiping etc. None of these units have such facilities and hence the same cannot be treated as paper mills with attached bamboo or wood pulp plant. Judgment of the Tribunal in the case of Ballarpur Industries Ltd. v. CCE, New Delhi reported in 1984 (17) E.L.T. 378 (Tri.) was cited wherein it was held that the words "plant attached thereto for making Bamboo pulp" in ,the Notification No. 208/67-C.E. should be interpreted as a plant designed and in fact used for making bamboo pulp and mere fact that the plant was Capable of being used for making bamboo pulp would not disentitle the appellants to the benefit of the exemption. (4) There is no allegation from the Revenue that the paper being manufactured by the appellants contains less than 75% of the pulp made from material other than bamboo hard woods, soft woods, reeds (other than sarkanda) or rags. When this is so, just because small quantity of veneer waste is used for making the pulp, which consist more than 75% of agro waste, the benefit of duty exemption cannot be denied to the appellants. The plants for making pulp in the unit of the appellants are not the plants for making wood pulp. They are the plants fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory does not has a plant attached thereto for making bamboo or wood pulp. Thus for being eligible for this exemption, two conditions must have satisfied:- (a) the paper/paper board must have been made from the stage of pulp and the pulp contains not less than 75% by weight of pulp made from material other than hard woods, soft woods, bamboo, reeds (other than sarkanda) or rags i.e. the pulp made from agro residues like baggase, wheat/rice straw, jute caddy etc. and (b) The factory should not have an attached bamboo or wood pulp plan. The Commissioner has, rejected the claim of both the appellants for this exemption on the ground that the pulp making plants in both the units are capable of making wood pulp also and therefore, the same have to be treated as wood pulp plants. 5. After considering the rival submissions on this point, we, for the reasons given below, are of the view that the pulp making plants attached to the appellants' factories cannot be considered as the plants for making bamboo or wood pulp (1) So far as appellant No. 1 is concerned, their main raw materials are wheat straw, 'sarkanda, bagasse, waste paper (totally about 97 98 %) and only the remaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 8% wood showing veneer cuttings and wood pulp. There are two cutters in this unit - one for cutting sarkanda/str and the other for cutting jute caddy. The sarkanda cutter is also used for cutting wood shovings. There are ten "Spherical Digesters" in this unit which use soda process for cooking. Eight digesters are for agricultural residue and wood chips and two digesters are for long fibre raw materials, which according to the appellant, is jute caddy not wood chips (statement dated 9-8-05 of Shri Pradeep Verma, General Manager (Production) and reply dated 25-1 1-05 of the appellant to the SCN). In this case also, Central Pulp Paper Research Institute and IIT, Roar in their separate opinion have opined that the appellant's plant appears to be suitable for pulping agricultural residues. Here also the Commissioner has not given any reasons as to why the opinion of these technical experts is not acceptable. (3) A wood/bamboo pulp plant has bamboo/timber storage yard, wood debarking machine, wood chipping machine, cyclone separation for removal of dust, wood chip screening machine for removing cut size chips etc. None of these two units have any such machinery. According to op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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