9911796707
TMI Blog2001 (2) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged 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 into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 hydrocarbon solvents but resists organic acids, alkalies, and alcohols. Not recommended for outdoor use, unmodified polymer yellows when exposed to light, but light-stable modified grades are available. Easil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 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 the said Table 1. (ii) Hawley s Condensed Chemical Dictionary Anti-static Agent The marked tendency of thermoplastic polymers to accumulate static charges which result in adherent particles of dust and other foreign matter has required study of possible means of eliminating or reducing this property. The foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the other hand, a sheet manufacturer obviates stress being built up in his extrudate by working his extruder in a different manner altogether as aforesaid and also by using devices to prevent extra tension between the rollers. For manufacture of sheets, the sides of the extrudate have to be trimmed so as to obtain uniformity in size, width, etc. On the other hand, the said in-process materials are never subjected to any such trimming process because the same are to be used captively during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 19-11-1993. The said show cause notice was adjudicated by the Commissioner who, vide his order dated 12-7-1996 dropped the proceedings against the appellant on merits as also on limitation. The said order passed by the Commissioner was accepted by the Revenue and no appeal was filed thereagainst. As such, he submits that the Department was aware of the coming into existence of the said intermediate product right from the beginning and no allegation of misstatement or suppression of facts with an intent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 filed the classification list, classifying their product as sheet . The said list has been duly approved by the Department. He submits that for the goods to become marketable, it is not required to be actually sold in the market. To obtain the marketability, the goods should have the potentiality to be sold and it is immaterial whether the same are being consumed entirely by the appellant in their factory and are not of standard period. Marketability is a question of fact to be decided in the facts on each and every case. He submits that the appellants were previously purchasing she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 mala fide intention. All the facts were before the Revenue. In this regard, we find that the Commissioner in his impugned order has observed at internal page : 43; that the appellant firm had collected certificates from various persons and associations to suppress the material fact relating to manufacture of HIP sheets and had deliberately suppressed the material facts in relation to manufacture of HIP sheets and misled the then Commissioner at the time of written submission as well as at the time of personal hearing on 9-10-1995. As the material fact was not before the then Commissioner, hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 market in a regular and normal course. The question has not been examined by the Commissioner from this angle. Mere comparison with the other similarly situated units who are engaged in the manufacture of disposable cups and glasses like the appellant by buying the sheets in question is based upon no sound legal principle. It is the marketability in the normal course of business which is the criterion for holding the goods marketable and not the sale of the goods in exceptional and extraordinary circumstances. In any case, there is not any evidence of such sale by the appellant. We fully agree with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. We also note that the penalty has been imposed under the provisions of Section 11AC of Central Excise Act, 1944 which was not in existence during the period to which the demand relates. It is well-settled, as held in the various cases referred to by the learned Advocate and reproduced in the earlier part of the said order, that Section 11AC cannot have any retrospective effect. Accordingly, we set aside the imposition of personal penalty upon the appellant. For the similar reasons, operation of the order relating to payment of interest in terms of the provisions of Section 11AB, is also set aside. 18. As re ..... 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