2000(03)LCX0310

IN THE CEGAT, NORTHERN BENCH, NEW DELHI

Shri K.K. Bhatia, Member (T)

COMMISSIONER OF C. EX., CHANDIGARH

Versus

MALWA FASTNERS (P) LTD.

Final Order No. A/683/2000-NB, dated 16-3-2000 in Appeal No. E/2693/99-NB

Cases Quoted

B.P. Alloys v. CCE — 1994(05)LCX0054 Eq 1994 (072) ELT 0576 (Tribunal) — Referred....................................... [Para 2]

CCE v. Kerala State Electronics Dev. Cropn. Ltd. — 1996(01)LCX0086 Eq 1996 (084) ELT 0456 (Tribunal)
— Referred..................................................................................................................... [Para 2]

Advocated By :   Shri A.K. Jain, JDR, for the Appellant.

None, for the Respondents.

[Order]. - The Revenue is in appeal against the Order-in-Original dated 23-8-1999 passed by Commissioner (Appeals), Chandigarh.

2. The Assistant Commissioner, Shimla vide his order dated 8-9-1998 disallowed the Modvat credit amounting to Rs. 81,000/- to the respondents on the grounds that as against the declaration of 'waste and scrap of plastics' under Sub-Heading 3915.90 as input, they had availed the Modvat credit on the goods compacted granules fasting, under the same sub-heading of the Central Excise Tariff. He rejected the submission of the party that they had received the goods under the declared sub-heading which falls under the description waste and scrap. The Commissioner (Appeals) has allowed the appeal of the party by relying on the decisions of the Tribunal in B.P. Alloys v. CCE, Chandigarh, 1994(05)LCX0054 Eq 1994 (072) ELT 0576 (T) and CCE, Cochin v. Kerala State Electronics Dev. Corpn. Ltd., 1996(01)LCX0086 Eq 1996 (084) ELT 0456 (T) and observed that the CEGAT in these decisions has held that 'waste and scrap' is a term wide enough to cover the description of inputs in question. Moreover, the appellants have declared the Tariff sub-heading correctly. Further the receipt of inputs and its use is also not in challange.

3. I have heard Shri A.K. Jain, DR. The respondents are not represented. It is argued before me that compacted granules received by the party is not waste and scrap and as such is not covered under Sub-heading 39.15; that as per Chapter Note 7 to Chapter 39, heading No. 39.15 does not apply to waste, pairing and scrap of a single thermoplastic material transformed into primary forms (Heading Nos. 39.01 to 39.14). It is also argued that rate of compacted granules was Rs. 12/- per Kg. whereas rate of waste and scrap of plastic was Rs. 5/- to 6/- per Kg and there is no logic why the party would use high cost material for the manufacture of their final product when waste and scrap of plastic was available at half the rate.

4. I have carefully considered the submission made before me. It is not in disputes that the goods waste and scrap of plastic are classified under heading 39.15 of the Tariff which was duly declared by the appellants as their inputs. The appellants have received the goods compacted granules classified under sub-heading 3915.90 from M/s. Flex Industries Ltd., NOIDA. It means that the Central Excise authority at the consigner's end has accepted/approved the classification of compacted granules as waste and scrap of plastic falling under sub-Heading No. 39.15, whatever be the prescription of Chapter Note 7. It is already settled by the cited cases that the term 'waste and scrap' has a wide ambit. I, therefore find to discripency in appellants taking the credit on impugned goods as per their declaration - waste and scrap of plastics.

5. As regards the plea of difference in the rates of compacted granules and that of ordinary waste and scrap of plastic as raised in the revenue appeal, it is observed that firstly this factor has no relevance to the proposition under consideration and secondly it is not made part of the show cause notice issued to the assesses. Since it is a question of fact which calls for verification, it cannot be allowed to be canvassed at the second appeal stage.

6. In view of above discussion, the revenue appeal fails and the same is rejected.

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Equivalent 2000 (124) ELT 852 (Tribunal)