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TMI Blog1991 (4) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... the land, building, plant and machinery belonging to the appellants and used in the manufacture, production, storage and removal of the aforesaid goods under clause (a) of sub-rule (2) of Rule 173Q of Central Excise Rules, 1944. However, he has given option to redeem the same on payment of fine of Rs. 5 lakhs in lieu of confiscation; (iv) Seized M.M. Monomer (1000 Kgs.) which was provisionally released to party on execution of B-11 bond; the party failed to produce, hence, Collector ordered for appropriation of cash security of Rs. 3500/-towards value of the aforesaid goods. 2. The facts of the case are that the appellants were engaged in the manufacturing of acrylic plastics sheets (APS) falling under Chapter 39 of CET Act, 1985, out of acrylic plastic scrap and fully exempt from Central excise duty under Notification No. 53/88, dated 1-3-1988. There was a surprise visit by the officers on 8-4-1986 for enquiry and checks and during the said enquiry the officers found that the appellants had claimed exemption under Notification No. 53/88, dated 1-3-1988 (earlier Notification No. 38/73, dated 1-3-1973 and Notification No. 132/86-C.E., dated 1-3-1986 as amended) on acrylic plastics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment has been that the appellants had manufactured and removed MMM classifiable and chargeable to duty of excise under Chapter 29 Heading 2916.00 of CET Act, 1985, and used the same in the manufacture of acrylic plastic sheets without payment of Central Excise duty. It was also alleged that the appellants had by recourse to fraud, wilful mis-statement and suppression of facts and with a deliberate and wilful intent to evade payment of duty of excise amounting to Rs. 36,01,913/- during the period from 1-4-1986 to 11-4-1988 without obtaining any Central Excise licence for such manufacture and without following any Central Excise Procedure and without payment of Central Excise duty leviable thereon had cleared the goods. It was also alleged that during the years 1985-86,1986-87 and 1987-88 they had manufactured Acrylic Plastic Sheets classifiable and chargeable to duty under Chapter/sub-heading 39.20 of the CET Act, 1985 out of non-duty paid MMM and removed the same without obtaining any Central Excise licence for such manufacture and evaded payment of duty of Rs. 1,84,17,489.27. A corrigendum to the Show Cause Notice was also issued on 4-11-1988 wherein the duty amount recoverabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Show Cause Notice. (v) They have contended that the MMM has been captively consumed in an uninterrupted continuous process of manufacture of plastic sheets and therefore there was no removal within the meaning of provisions of Rule 9 and 49 of the Rules. (vi) They have stated that there is no scope for invoking proviso to sub-section (1) of Section 11A of the Act as they have not committed any of the alleged acts, as they had been filing declaration in the prescribed form with the Department from the beginning describing therein the details of the full description of the goods manufactured in the factory, process of manufacture, value/quantity of goods cleared during the preceding financial year. They have relied on the declaration filed by them for the years 1985-86, 1986-87 and 1987-88, a letter dated 24-10-1985 received by them from Range Superintendent and their reply dated 13-2-1986. They have contended that their activity of manufacture was within the knowledge of the Department from its inception from the factory. The Department is aware of the fact that they were engaged in the manufacture of Acrylic Plastic Sheet out of duty paid scrap and during the course of manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 which is re-produced below :- Dear Sir, Kindly refer to your letter No. MISC/III/85, dated 24-10-1985. In this connection we have to state that we are manufacturing MM Monomer out of plastic scrap which is already exempted vide Notification No. 132/82, dated 11-5-1982. Hence there is no necessity to obtain the licence. We have to further say that we are not going to sale MM Monomer during the current financial year 1985-86. At present we are manufacturing Acrylic Plastic Sheet from the said MM Monomer. This is for your kind persual and reference. Thanking you." and has observed that the words at present we are manufacturing Acrylic Plastic Sheets from the said MM Monomer. This is for your kind perusal and reference. Thanking you. is not in a regular flow and that space in the letter had been interpolated, squeezed in and added at the end, the above noted sentence, thereby over-flowing the small space which is normally left between the end of the letter and the remark, Yours faithfully . He has observed that the said letter has not been received by the Superintendent and to this effect the office had also sent a telegram on 11-7-1989 asking them to produce the evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the duty paid material of Heading Nos. 39.01 to 39.15, it would be entitled to the exemption as envisaged under Notification No. 53/88-C.E., dated 1-3-1988. He has also relied on the rulings of this Tribunal as referred to in the case of Bradma of India Ltd. v. Collector of Central Excise [1990 (50) E.L.T. 533 (Tribunal)]. He has further contended that the Show Cause Notice is time-barred. He has relied upon the declaration filed by the party in support of his contention that the Department was aware of the process of manufacture of the final product. In this connection, he has relied on the following rulings :- (1) Bramec Suri (P) Ltd., Delhi v. Collector of Central Excise -1986 (25) E.L.T. 79 (Tribunal). (2) Collector of Central Excise, Hyderabad v. Uma Laminated Products (P) Ltd. -1984 (17) E.L.T. 187 (Tribunal). (3) Collector of Central Excise v. Chemphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.). (4) Padmini Products v. Collector of Central Excise -1989 (43) E.L.T. 195 (S.C.). (5) Hercules Tyre Rubber Industries, Rai, Sonepat (Haryana) v. Collector of Central Excise, Chandigarh -1983 (13) E.L.T. 1017 (CEGAT). (6) Collector of Central Excise, Bhubane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of M.M. Monomer. The letter of the Superintendent dated 24-10-1985 is re-produced below - Please refer to your declaration filed on 28-5-1985 While checking the above declaration it is observed that during financial year 1984-85 you had exceeded 80% of the exemption limit specified in Notification No. 77/85. You are therefore, requested to take out the licence for manufacturing goods falls under TI 68 i.e. M.M. Monomer immediately". This letter also refers to M.M. Monomer. In view of these materials before us the charge of suppression or mis-declaration fails. It cannot be said that the Department was not aware of the activities of the appellants of manufacture of M.M. Monomer as an intermediate product. 7. With regard to first question of durability of M.M. Monomer, it is to be observed that there is no charge made out about M.M. Monomer being removed from the factory without paying duty. Admittedly, the subject M.M. Monomer has been consumed in the manufacture of final product Acrylic Plastic Sheets. The relevant portion of Notification No. 38/73 pertaining to exemption to Acrylic Plastic sheets is reproduced below :- Sr. No. Description Conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om claiming the benefit of the exemption of the above noted notification. Therefore, the appellants are entitled to succeed in Appeal No. 2309/86-C. The appeal is allowed. 11. Appeal No. 2625/86-C deals about refund claim of the appellants for the duty paid under protest. We have held on merits that the appellants are entitled to claim exemption under the above notification. In this appeal, the refund claim was rejected on the ground that the benefit of Notification No. 182/82 is not available to the appellants. The refund claim pertains to the period 1-1-1983 to 30-6-1983 which pertains to the period after Tariff Item 15A was restructured. As a consequence of the said restructuring of Tariff item 15A, the present goods fell for classification under Item No. 68 CET. Notification No. 182/82 reads as follows - In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944 the Central Government hereby exempts articles made of plastics, falling under item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from the whole of the duty of excise leviable thereon : Provided that - (a) such articles are produced out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instance, M.M.M. had been marketed by them in one of the years. Therefore, it may be safely assumed that it was marketable and therefore goods for the purpose of excise levy.) The question is whether the emergence of M.M.M. at an intermediate stage in the process of manufacture would serve to deny the benefit of exemption from duty to acrylic sheets manufactured out of duty-paid scrap. The Tribunal has held that emergence of an intermediate product, viz., plastic sheet out of artificial resin, would not preclude the applicability of the exemption (Notification No. 68/71-C.E., dated 29-5-1971) conferred on articles of plastics produced out of duty-paid artificial resins - see Bradma of India Ltd. v. Collector of Central Excise -1990 (50) E.L.T. 533. The ratio of this decision is, by analogy, applicable to the instant case as well. Therefore, the levy of duty on the acrylic plastic sheets was unwarranted. 10. I note that the Central Board of Excise and Customs has also taken a similar view with reference to Notification No. 68/71-C.E., dated 29-5-1971. The point considered was whether plastic bangles made from tubes manufactured out of scrap of plastics through the intermediate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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