2006 (6) TMI 327 - AT - Central Excise

Tribunal grants waiver for factory processing agro residues, not bamboo or wood pulp

SHREYANS INDUSTRIES LTD. Versus COMMISSIONER OF C. EX., LUDHIANA

SHREYANS INDUSTRIES LTD. Versus COMMISSIONER OF C. EX., LUDHIANA - 2006 (205) E.L.T. 300 (Tri. - Del.) Issues: Application for waiver of pre-deposit of duty and penalty based on eligibility for concessional rate under Notification No. 6/2002-CE due to the absence of a plant for making bamboo or wood pulp.Analysis:1. Eligibility for Concessional Rate: The applicants sought waiver of pre-deposit and penalty under Notification No. 6/2002-CE, which provides a concessional rate of duty on paper and paperboard manufactured with specific pulp composition. The condition stipulates that the exemption does not apply if the factory has a plant for making bamboo or wood pulp attached to it.2. Applicant's Contention: The applicant argued that their factory lacks the facility to manufacture bamboo or wood pulp. They highlighted having 10 digesters capable of producing pulp from unconventional raw materials, as confirmed by IIT Roorkee. The applicant emphasized using jute as raw material with long fibers, and the minimal use of wood chip and veneer, well below the threshold specified in the notification.3. Revenue's Argument: The Revenue contended that the factory possesses two digesters capable of manufacturing pulp from long fibers, indicating the capability to produce bamboo or wood pulp. They relied on technical literature showing the use of a process suitable for wood pulp cleaning, suggesting the factory's capability.4. Judgment: The Tribunal reviewed the General Manager's statement, noting that the digesters were primarily used for agro residues and fibers, with no explicit mention of bamboo or wood pulp production. The opinion from IIT Kharagpur further supported the absence of facilities for wood pulp manufacturing, emphasizing suitability for fibers and agro residues only. Consequently, the Tribunal found the applicant's case strong and waived the pre-deposit requirement for duty and penalty, allowing the appeal to proceed.This detailed analysis captures the key arguments presented by both parties, the interpretation of the relevant notification conditions, and the Tribunal's rationale for granting the waiver based on the lack of evidence supporting the Revenue's claim of bamboo or wood pulp manufacturing facilities at the applicant's factory.