9911796707
TMI Blog1997 (3) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... astic granules in the manufacture of plastic films and waste or scrap is generated as a by-product. The scrap is processed and converted into plastic granules and again used in the manufacture of plastic films. Scrap was being cleared at nil rate of duty under items 35 and 36 of the Table to exemption Notification No. 53/88. Appellant contended that under items 35 and 36 of the notification, the exemption of duty in excess of 25% would apply to film manufactured out of the granules obtained by reprocessing the scrap. Appellant accordingly having cleared plastic film and demand was issued alleging that no duty had been paid on the scrap or reprocessed granules and therefore the condition stipulated in column 5 of the notification, namely tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. He relies, for this purpose, on the two member decision of this Tribunal in CCE, Bangalore v. Gunnam Subbarao Investments (P) Ltd. - 1996 (17) RLT 771 (CEGAT-SZB). The facts of the case are identical to the facts of the present case also. The Bench observed as follows : Thus a deemed fiction has been created to treat the goods in respect of which Modvat credit was taken as if the same were manufactured in the respondents factory.... Since the duty burden has been lifted from the goods, this condition therefore and the purpose for which the notification has been issued cannot be taken to have been complied with. 6. We find the above decision not in consonance with the observations of the Larger Bench of the Tribunal in Dai Ichi Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvations of the Larger Bench, it is clear that the amount equal to the duty paid on the inputs is deemed to be returned to the manufacturer and thereupon the money belongs to the manufacturer and this involves only reimbursement of the duty paid. This cannot and does not mean that the duty has not been paid on the input. On the other hand, the very notion of reimbursement would mean that duty had been paid and amount had been reimbursed. Apparently the attention of the two Member Bench was not invited to the observation of the Larger Bench in Dai Ichi Karkaria Ltd. v. Collector of Central Excise, Pune. In the circumstances, we are bound to follow the view taken by the Larger Bench and we do so. This would mean that the original granules use ..... X X X X Extracts X X X X X X X X Extracts X X X X
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