Plastic waste and scrap exemption cannot be denied merely because Modvat credit was taken on duty-paid inputs.

Exemption for plastic waste and scrap under Notification No. 14/92 was available where the scrap arose from duty-paid inputs, because the notification did not exclude cases in which Modvat credit had been taken. Availment of Modvat credit on the inputs did not change their duty-paid character, and the same principle applied as under the earlier proforma credit rule. The exemption could not therefore be denied solely on the ground that credit had been claimed on the inputs from which the scrap arose.

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Issues: Whether exemption for waste and scrap of plastic under Notification No. 14/92 could be denied merely because Modvat credit had been taken on the duty paid inputs from which the scrap arose.

Analysis: The exemption entry applied to waste and scrap arising from goods on which duty of excise or additional duty of customs had already been paid. The taking of Modvat credit on the duty paid inputs did not alter the duty-paid character of those goods. The absence of any condition in the notification excluding cases where credit had been availed meant that mere availment of Modvat credit could not defeat the exemption. The same principle applied as in the earlier rule concerning proforma credit.

Conclusion: The exemption could not be denied on the sole ground that Modvat credit had been taken on the inputs.

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