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TMI Blog2001 (2) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the manufacture of disposable cups, glasses, etc., classifiable under Heading 39.23 during the period relevant for the purposes of the said appeal i.e. from December, 1993 to May, 1998. The appellants were clearing a part of their final products free of duty in terms of various notifications holding the field. A portion of their final products was also cleared on payment of duty after availing the Modvat credit inasmuch as some of their buyers insisted on payment of duty. There is no dispute as regards the payment of duty on their final product or availing of the exemption in respect of a portion of their final products under various notifications issued from time to time. 2.3 The dispute relates to the intermediate product arising in the appellants' factory during the manufacture of disposable cups, glasses, etc. The demand of duty had been confirmed against the appellants in respect of High Impact Polystyrene sheets (HIP sheets) which the Revenue alleged, came into existence during the course of manufacture of the final products out of granules. Inasmuch as the appellants were availing the exemption in respect of their final products, the said HIP sheets coming int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clopedia of Science & Technology Polystyrene resin : A hard transparent, glasslike thermoplastic resin. Polystyrene is characterised by excellent electrical insulation properties, relatively high resistance to water, high refractive index, clarity and low softening temperature. (ii) Academic Press Dictionary of Science and Technology Polystyrene : Organic Chemistry (-C6H5CHCH2-)n, a combustible, transparent polymerized styrene of high strength and impact resistance that is an excellent electrical and thermal insulator, widely used for such purposes as packaging, injection molding, insulation, and lamination. (iii) Hawley's Condensed Chemical Dictionary Polystyrene CAS : 9003-53-6 (C6H5CHCH2)n, Polymerized styrene, a thermoplastic synthetic resin of variable, molecular weight depending on degree of polymerization. Properties : Transparent, hard solid; high strength and impact resistance ; excellent electrical and thermal insulator. Attacked by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is discharged and part remains on the surface. The charges are equal, but the signs opposite. The static generated is a surface phenomenon. If the substrate is conducting, the electrons are dissipated and the excess is eliminated. If the substrate is non-conductive, i.e. an insulator, static electricity becomes apparent. Function Anti-static agents, also called antistats, promote static-charge decay of surfaces and reduce the clinging effect of fabrics, eliminate spark discharge, and prevent accumulation of dust and dirt. Applications include plastic films, containers, fibers, and many other consumer goods (vide also Electromagnetic Interference)" At page 59 of the aforesaid book in Table 1, various chemicals and their respective concentration have been mentioned for anti-static treatment of plastics including polystyrene. For surface treatment of almost all plastics (PS, that is, polystyrene has been specifically mentioned), the names of various anti-static agents and their concentration have been mentioned in the first four items and the last two items of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture variations resulting in ridges, webs and steaks on the surface of the in-process materials obtained from the extruder at the appellant's factory. Such materials with ridges, webs and streaks can never be considered as sheets. For the manufacture of sheets, higher extruder temperature has to be employed for meeting the requirements of clarity, gloss and thickness uniformity. As against this, the said in process materials are extruded at the appellant's factory by operating the extruder only at a temperature of about 2000C since thickness, surface regularity, clarity or gloss are not relevant or material having regard to the subsequent use of the said materials within the factory itself on Thermoforming machine. For manufacture of sheets, the extrudate from the extruder is fed onto slow speed oil heated rollers for slow cooling. As against this, the said in-process materials are fed onto the rollers which operate at high speed and are water cooled for rapid cooling of the extrudate so as to obtain faster output. Because of low extrusion temperature and rapid water cooling, stress builds up in the extrudate at the appellant's factory and the same lacks in strength and finish. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove the marketability of the disputed item is on the Revenue, which is required to produce an affirmative evidence to that effect. By merely rejecting the appellant's evidence, the burden does not get discharged, as has been held in the various decisions and judgments of the Hon'ble Supreme Court. In support of his above submission, he relies upon a number of precedent decisions, which we would discuss in the later part of this order. 5. Alternatively, Shri Bagaria submits that even if the goods are to be treated as excisable goods, the same would merit classification under sub-heading 3926.90 as "other articles of plastics and articles of other materials of Heading Nos. 30.01 to 39.14", in which case the same would be fully exempt from central excise duty under various notifications in force from time to time. The demand of duty has also been assailed on the point of limitation. The period involved in the present appeal is from December, 1993 to May, 1998, whereas the show cause notice was issued on 9-11-1998. Shri Bagaria, learned Advocate submits that the same dispute arose in the earlier period also, when the show cause notice was issued to the appellant on 19-11-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenged the order of imposition of personal penalty on M/s. Indian Plastics Federation. He submits that there is no ground for imposition of penalty upon the said appellant. They had only given their opinion as regards the marketability of the appellant firm's product on their request. The ingredients of Rule 209A are not satisfied accordingly. He, therefore, prays for setting aside the personal penalty on the said appellant. 10. The Revenue is represented by Shri R.K. Chowdhury, learned Advocate. He submits that the earlier dropping of proceedings by the Commissioner is no bar for raising of demand again inasmuch as the periods in the two proceedings are different. The present order has been passed on the basis of subsequent investigations conducted by the Revenue, which has resulted in fresh evidence against the appellants. As such, there is no estoppel from raising the demand of duty. He submits that the subject goods are known in the market as "sheets" and the Commissioner has already passed a detailed order rejecting the evidence adduced by the appellant. He submits that the test certificate, dated 11-9-1995 describes the subject goods as "sheets" and the appellant had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst discuss the point of limitation. The period involved in the present appeal is from December, 1993 to May, 1998. The show cause notice was issued on 9-11-1998 i.e. after a period of six months from the relevant date, except the period of May, 1998. It is an undisputed fact on record that the appellants were served with an earlier show cause notice raising demand of duty on identical grounds for the period from 1-4-1991 to 8-8-1991. The said show cause notice was decided by the earlier Commissioner vide his order No. 146 (Ch. 39) 93-Commr. 39/96, dated 12-7-1996. Vide the said order, the demand of duty was dropped by him on merits as also on the point of limitation. Thereafter, there has been no change in the factual or legal position. It is the same very HIP sheets extruded from the granules which are the subject-matter of the present appeal, which were held to be non-excisable by the earlier order of the Commissioner. The appellants have strongly contended that in case the factual and legal position prevailing during both the periods is same, the Commissioner should have followed the earlier orders and no suppression or misstatement can be attributed to the appellants with any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the expert opinion, it was well within its rights to rebut the same with an equally strong evidence and no finding as regards the misstatement or suppression can be given against the appellant on this ground. As such, we are fully convinced that the extended period of limitation was not available to the Revenue. Accordingly, we set aside that portion of the demand of duty which is beyond the normal period of six months from the relevant date. 14. As regards the excisability of the HIP sheets, we find that the appellants have strongly contended that the same are not in marketable condition. For the said purposes, they have referred to the various technical publications and the opinions given by the experts. The Commissioner has observed that the marketability is a question of fact to be decided in each case and for holding the goods to be marketable, it is not necessary that they should be actually marketed, but they should have the potentiality for being sold in the market. While there can be no quarrel about the above legal position, nevertheless it has to be examined from the point of view that whether the goods in question are capable of being bought and sold in the mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese observations, we remand the matter to the Commissioner for fresh decision on the marketability and excisability of the sheets in question. 15. As the matter has already been remanded, the appellant's plea as regards the correct classification of the sheets, if held to be marketable, may also be looked into by the Commissioner. 16. In case the demand of duty is held payable by the appellant for the period well within the period of six months from the date of issuance of the show cause notice, the appellant would be given relief to the extent of Modvat credit of duty paid on the inputs used in the manufacture of the said sheets, inasmuch as it is well-settled that in case of a subsequent demand of duty, the benefit of Modvat credit has to be extended, irrespective of non-following of the procedure. 17. As regards the confiscation of the HIP sheets with the redemption fine, we do not find any justification for confiscating the said goods, inasmuch as the earlier order of the Commissioner was in favour of the appellant and was being followed by them. For the same reason and also for the fact that the major part of the demand has been held by us to be time-barred. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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