9911796707
TMI Blog1998 (10) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... s of payment of duty. (c) Incidence of duty has been passed on to buyers/consumers. Therefore, refund, if any, can be credited to Consumer Welfare Fund. 2. The appellants replied as follows :- 2.1 The appellants herein are manufacturers of MMSF falling under heading 5501.20 of the CETA, 1985. For the purpose of manufacturing the said MMSF, it uses virgin raw materials i.e. PTA and DMT and also the waste (by way of recycling) generated during the manufacture of MMSF. In other words, waste generated in manufacture of MMSF is converted into polymers, after taking permission from Central Excise Officers. These are mixed with virgin polymers manufactured out of duty paid PTA and DMT. 2.2 Central Government issued a Notification No. 160/89-C.E., dated 17-7-1989 under Section 5A(1) of the Central Excise Act, 1944 exempting MMSF falling under heading 5501.20 from duty in excess of Rs. 8.43 per kg. provided the said MMSF have been manufactured from wastes falling within Chapter 54 or 55 of the Schedule by the process of recycling of such wastes in India . This rate was reduced latter by Notification 57/90-C.E., dated 20-3-1990 to Rs. 6.50 per kg. 2.3 They filed a classification l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e when the higher duty was paid during the relevant period of refund and immediately thereafter i.e. from 1-11-1990 when the lower duty was paid in terms of the said notification. This clearly indicates that the higher duty element was absorbed by the appellants and not passed on to the customers. 3.1 On adjudication, the Assistant Collector rejected the refund claim on merits for non-maintenance of separate records and the refund claim being barred by time. Plea of absorbing the higher duty element in the cum duty price was also not accepted as a distorted argument when the initial price has been admitted to be cum duty price. Therefore, it was held that the refund claim, if any, was required to be credited to Consumer Welfare Fund. 4.1 On appeal before the Collector (Appeals), the appellants did not succeed. 4.2 Apart from taking all the aforesaid pleas, the appellants had taken an additional plea that the classification list dated 20-2-1990 was finally approved only on 19-2-1991 stipulating a few conditions relating to accounting of MMSF-proportional to polymers produced from waste and polymers from virgin materials - were kept because there were no such directions prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates that benefit of the said notification will be available even if MMSF is manufactured from `waste in admixture with virgin materials. 5.3 He further points out that the authorities below have not disputed that MMSF has been manufactured from waste as well as virgin materials. MMSF manufactured, at final stage, could not be distinguished whether it is manufactured from waste or virgin materials. Even the R.G.1s. stipulated by the Assistant Collector while finally approving the c.l. in February 1991, could be maintained only on the basis of the ratio in which polymers from waste or from virgin materials were mixed as shown in the Processing Register. Latter mentioned record being the primary register, could as well from the basis of determining MMSF of the two varieties during the period of refund. In fact refund amount is based on calculation of quantity of MMSF pertaining to recycled waste on the basis of figures of that register. Learned consultant, therefore, submits that objection raised by Revenue is merely for the sake of objection without any substance in it. 5.4 On the question of refund being barred by time, learned consultant submits that the lower authorities, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aste but from admixture of waste with virgin material is not correct since the said notification does not envisage that the MMSF should be manufactured wholly or entirely or exclusively from waste. We are strengthened in this finding by Apex Court s rulings in (i) Union of India v. Tata Iron Steel Co. - 1977 (1) E.L.T. (J 61), and Aluminium Corporation of India v. UOI - 1978 (2) E.L.T. (J 452). In the above cases before the Apex Court, notification envisaged exempted rate of the final excisable products were manufactured from certain duty paid materials. The manufacturers in those cases manufactured their products with mixture of duty-paid and non duty paid materials. Revenue intended to deny the benefit of duty on final product proportionate to the duty paid materials claimed by the former. Extracts from para 23 in Tata Iron Steel : ..... If the intention of the Government were to exclude the exemption to duty-paid pig iron when mixed with other materials then the notification would have used the expression `only , or `exclusively or `entirely in regard to duty paid pig iron.... 7.2 We also agree with the learned consultant that the Collector (Appeals) in giving th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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