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TMI Blog2013 (11) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 25784/2013 - Dated:- 2-8-2013 - SHRI B.S.V.MURTHY AND SHRI ANIL CHOUDHARY, JJ. For the Appellant : Mr. S. Thirumala, Adv For the Respondent : Mr. R.K. Singla, A.R. JUDGEMENT Per. B.S.V.MURTHY; The appellant is a manufacturer of rubberized coir mattresses and rubberized foam mattresses. In both the products Polyurethane Foam (PU Foam) is used which is also manufactured by the appellant. Prior to March 2011, both the final products other than PU foam manufactured by the appellant were totally exempt. In the budget of 2011, 1% duty was imposed in terms of Notification No. 1/2011-CE on both the final products other than PU foam manufactured by the appellants. The Notification prescribed 1% duty if no CENVAT credit is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumption are exempt if the finished product is liable to duty. According to Notification No 1/2011-CE, 1% duty that is payable on the finished products does not render the goods as the ones which are considered as dutiable in terms of the law and they have to be treated as exempted goods. In such a situation, utilization of PU foam manufactured within the factory for the purpose of manufacture of rubberized foam mattresses and rubberized coir mattresses which are exempt in terms of Notification No. 1/2011 since the duty at 1% was paid by the appellant was clearly not correct. The question that arises in this case is whether the appellant s action of paying duty on the PU foam cleared within the factory would be sufficient in terms of No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant in accordance with the statute would be clearance of PU foam within the factory without payment of duty which was rectified by the appellant as soon as the same was pointed out. This is because the exemption is available for captively consumed PU foam when used in dutiable products would continue to be available even after introduction of Notification No. 1/2011. Further, we also find that as submitted by the learned counsel, the decisions of the Tribunal in the case of Tata Chemicals Ltd. Vs Commissioner of Central Excise Rajkot [2008(232) E.L.T. 737 (Tri-Ahmd)] and M/s Shivalik Agro Poly Products Ltd. Vs. Commissioner of Central Excise, Chandigarh [1999 (114)E.L.T. 760 (Tribunal)] are on the same issue and support the case of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of electricity in the excise product as well as dutiable product was known to the Department, the same thing cannot be said about soda ash. It is quite possible that appellants may be accounting the soda ash separately and using the same for exempted products. Only on verification, it has been found that the soda ash used for manufacture of brine, which was in turn used for exempted product was not duty paid. Therefore, we feel that extended period has been rightly invoked. Further the fact that appellants on their own paid the duty on soda ash used for producing exempted goods on 5-9-2006 voluntarily also supports view. They have also claimed that they have reversed the credit also even though duty is paid on soda ash used for manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Modvat credit cannot be denied, is directly applicable. We also find that this is the view taken in the case of Shri Ram Vinyl and Chemicals (Final order No. 659/99-C, dated 27-7-1997) and there is no difference between that case and the present case except that the inputs in the Shri Ram Vinyl and Chemicals case are plastic granules, intermediate product PVC resin and final product PVC compound. Following the ratio of the Apex Court decision in the case of Chandrapur Magnet Wires, we hold that the appellants are entitled to the benefit of Notification 14/92 for protective covers/tarpaulins, in terms of Sl. No. 21 of the table annexed to that Notification. The reproduced paragraphs above would show that the decisions of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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