2004 (6) TMI 489 - AT - Central Excise

Tribunal Upholds Benefit Denial, Directs Pursuit of Alternative Exemption, Emphasizes Notification Compliance

The Tribunal upheld the denial of benefits under Notification No. 89/95 due to the Appellants' exemption under Notification No. 6/2000-C.E. tied to the ... Paper - Exemption - Waste/Scrap paper - Appeal to Tribunal - Grounds Issues:- Denial of benefit of Notification No. 67/95-C.E. and Notification No. 89/95- Exemption under Notification No. 6/2000-C.E. for Kraft papers- Claiming benefit under Notification No. 10/96-C.E. for waste and scrapAnalysis:The appeal was filed against the denial of benefits under Notification No. 67/95-C.E. and Notification No. 89/95. The Appellants, engaged in manufacturing various types of paper, argued that waste and scrap generated during the manufacturing process were captively consumed in the production of final products. They did not contest the denial of benefits under Notification No. 67/95-C.E. but focused on Notification No. 89/95. The Commissioner (Appeals) rejected the benefit under Notification No. 89/95, citing the Appellants' exemption under Notification No. 6/2000-C.E. for Kraft papers, which had a limit on duty exemption based on the quantity of clearances in a financial year.The Appellants contended that Notification No. 6/2000-C.E. was not based on the value or quantity of clearances in a financial year, but on a specific limit for paper and paperboard production. They also sought the benefit of Notification No. 10/96-C.E., which exempts excisable goods consumed within the factory for specified manufacturing purposes. However, the Senior Departmental Representative argued that Notification No. 6/2000-C.E. was indeed based on the value or quantity of clearances in a financial year, as per a previous Tribunal ruling.The Tribunal analyzed the notifications and determined that Notification No. 6/2000-C.E. did provide exemption based on the quantity of clearances, contrary to the Appellants' argument. The Tribunal referred to a previous case to support this interpretation. Consequently, the benefit of Notification No. 89/95 was deemed unavailable due to the Appellants' exemption under a notification tied to the quantity of clearance. Additionally, the Tribunal noted that the Appellants had not pursued the benefit under Notification No. 10/96 before the Adjudicating Authority, prompting a remand to assess the fulfillment of conditions under that notification. The Tribunal directed the Appellants to present their case on Notification No. 10/96 before the Adjudicating Authority within a specified timeframe, emphasizing the flexibility to claim notification benefits at any stage of proceedings.In conclusion, the Tribunal disposed of the appeal by upholding the denial of benefits under Notification No. 89/95 while remanding the matter for further examination regarding the potential applicability of Notification No. 10/96, emphasizing the importance of fulfilling notification conditions for availing exemptions.