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of <h1>Inclusion of Materials in Duty Calculation Upheld Under Notification 8/99-CE</h1> <h3>Ariya Flexi Labels Versus Commissioner of Central Excise, Tirunelveli</h3> Ariya Flexi Labels Versus Commissioner of Central Excise, Tirunelveli - 2013 (295) E.L.T. 482 (Tri. - Chennai) Issues: Determining whether the value of plastic film and plastic laminated film captively consumed should be considered in calculating the aggregate value of clearances for exemption under Notification 8/99-CE.Analysis:The appellants, engaged in manufacturing plastic products, were using plastic film and plastic laminated film to produce plastic pouches. They were availing exemptions under Notification 8/99-CE for clearances up to a specified value without duty payment. The dispute arose as the Revenue contended that the value of plastic film and laminated film used for manufacturing exempted plastic pouches should have been included in the aggregate value of clearances for duty calculation. Three Show Cause Notices were issued for different periods, but the appellants did not provide a satisfactory response during adjudication, resulting in an ex-parte decision confirming the duty demand with penalties under Central Excise Rules.The contention of the appellant was based on para 3(c) of Notification No.8/99-CE, which exempted clearances of specified goods used as inputs for further manufacture within the factory. The appellant argued that since plastic film and laminated film were used internally for making plastic pouches, their value should not be added to the aggregate clearances for exemption calculation. However, the Revenue argued that when a final product is duty-exempt, it ceases to be specified goods, citing an entry in the notification.The Tribunal analyzed the arguments and upheld the lower authority's decision. It clarified that the exemption under Notification 8/99-CE applied as long as the plastic pouches were exempted, irrespective of any value limit. Therefore, the value of plastic film and laminated film used in manufacturing these pouches had to be included in the aggregate clearances for duty calculation. The Tribunal rejected the appeals, affirming the decision of the lower authority.In conclusion, the Tribunal's judgment emphasized the interpretation of the notification's provisions and the application of duty exemptions to the manufacturing process, ultimately ruling in favor of considering the captive consumption of plastic film and laminated film in calculating the aggregate clearances for duty exemption under Notification 8/99-CE.
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