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of <h1>Tribunal rules wash water for Polyamide chips not subject to excise duty</h1> The Tribunal ruled in favor of the appellant, holding that wash water used in the washing of Polyamide chips is not subject to excise duty under ... Stay/Dispensation of pre-deposit Issues:1. Whether wash water is subject to excise duty under sub-heading 3824.90.2. Whether wash water can be considered a manufactured product for excise duty purposes.3. Whether the demand for excise duty on wash water is valid under the proposed classification.Analysis:1. The issue in this case revolves around the classification of wash water for excise duty purposes under sub-heading 3824.90. The appellant, who used wash water in the washing of Polyamide chips, faced a duty demand of approximately Rs. 1.2 crore for the period 2002-2004. The revenue authorities contended that wash water falls under excise duty. However, the appellant resisted this demand.2. The appellant argued that wash water should not be considered a manufactured product and, therefore, should not be excisable. Additionally, they pointed out that the Show-cause Notice initially proposed classification under Chapter heading 29, but the final order deviated from this proposal and demanded duty under sub-heading 3824. The appellant raised concerns about this deviation.3. The Tribunal, after hearing both sides and perusing the record, found merit in the appellant's contentions. It was noted that caprolactam, which is retrieved from wash water, had previously been determined by the Supreme Court as not being an excisable product. Given this precedent, the Tribunal concluded that wash water, containing only traces of caprolactam, cannot be treated as a product subject to excise duty. Moreover, the Tribunal emphasized that the adjudicating authority cannot exceed the scope of the Show-cause Notice in making its decision. As a result, the requirement for pre-deposit was waived, and a stay of recovery was ordered until the appeal is disposed of, with the appeal scheduled for a future hearing.
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