9911796707
TMI Blog1997 (12) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-1986 for the reason that their final product was manufactured out of duty paid goods falling under Headings 39.01 to 39.15. Since the Department was of the view that the raw material was non-duty paid inasmuch as the appellants had taken credit of duty paid on the inputs, a show cause notice was issued on 14-2-1991 proposing recovery of differential duty of Rs. 5,37,749.25 on Celluloid Nitrate Sheets manufactured and cleared during the period from May, 1986 to November, 1987 under the proviso to Section 11A of the Central Excise Act, 1944. The allegation in the show cause notice was that the appellants had wrongly availed the benefit of the notification while suppressing the fact as regards non-duty paid character of the inputs in the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion along with materials falling under Chapters not specified therein. The only ground on which the show cause notice proposes recovery of differential duty is that the inputs lose their duty paid character once credit of duty paid thereon has been taken by the assessees. His further submission was that the use of the materials falling under Chapters/Headings which are not specified in the notification is not a bar for availment of the notification since admittedly, the appellants were making their final products out of Nitrocellulose which was the principal ingredient for the manufacture of Celluloid Nitrate Sheets and Nitrocellulose which was the principal ingredient was falling for classification under the Chapter sub-headings specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notification namely, that the final product viz. plastic films or sheets of thickness not exceeding 0.25 mm and falling under specified sub-headings of Heading 3920 and cellular (excluding polyurethane) films or sheets falling under sub-heading 3921.11 or 3921.12 of the Schedule to the CETA, 1985 must be produced out of goods falling under Headings 39.01 to 39.15 of the Schedule must be satisfied and since the condition prescribed under the proviso has not been fulfilled inasmuch as the appellants used other materials also (other than those falling under 39.01 to 39.15), the benefit has rightly been denied. In view of the above, he submits that it is not correct to contend that the demand has been confirmed in the impugned order on a gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wholly out of artificial resins or plastic materials or cellulose esters and ethers in any form falling under T.I. 15A(1), the products made predominantly out of inputs falling under T.I. 15A(1) and having some admixture of inputs falling under T.I. 15A(3) were also eligible for exemption under the notification. In the present case also, Notification 269/86 does not stipulate that the final products specified thereunder should be produced exclusively or wholly out of materials falling under Headings 39.01 to 39.15 of the Schedule to the CETA, 1985. Therefore, applying the ratio of the Eagle Flask (P) Ltd. case, (supra), we hold that the Celluloid Nitrate Sheets manufactured both out of specified inputs and non-specified inputs would be eli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, in this respect even at this stage the point has not been squarely met with even though in a number of Tribunal orders, this aspect has loomed large directly or indirectly or has been at the back of the decision; And it was therefore expected that the department would come out with the relevant technical material w.r.t. the Collector's observations and findings and the case law cited above. Even otherwise once the specified item is the principal input or ingredient, use of other items (in addition) in a small proportion hardly matters until and unless the latter could be shown to make a substantial or significant difference or their use was banned explicitly or by necessary implication. Therefore, in my opinion even on merits the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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