2024 (10) TMI 142 - AT - Central Excise

Imported acrylic reprocessed granules qualify for exemption under N/N. 04/2006 C.E. as waste and scrap under Chapter 39

Intercontinental Polymer Pvt Ltd Versus Commissioner of C.E. & S.T. -Surat-i

CESTAT Ahmedabad allowed the appeal regarding exemption under N/N. 04/2006 C.E. for imported acrylic reprocessed granules. The revenue denied exemption ... Eligibility for exemption under N/N. 04/2006 C.E. - denial of exemption on the ground that the 'imported acrylic re–processed granules (mix color)' was not covered under the `Waste' because as per Customs Tariff Act, 1975, all the waste, parings, and scraps are covered under Chapter Heading 3915 - HELD THAT:- The issue is no longer res-integra as exactly the same issue has been decided in the appellant’s own case INTERCONTINENTAL POLYMER PVT LTD VERSUS C.C.E. & S.T. -DAMAN [2023 (6) TMI 453 - CESTAT AHMEDABAD] where it was held that 'it is evident beyond the scope of any doubt that the imported plastics granules were nothing but waste and scrap of goods falling under Chapter 39. In the present matter we are of the considered view that imported goods have to be considered as waste &scrap of goods falling under Chapter 39 and entitled to above exemption. Hence we do not find any merit in impugned order.' The impugned orders are not sustainable - Appeal allowed. Issues:1. Eligibility for exemption under Notification No. 04/2006 C.E. for manufacturing re-processed plastic granules.2. Interpretation of the Customs Tariff Act regarding waste, parings, and scraps under Chapter Heading 3915.3. Time-bar for demand due to suppression of facts.Analysis:Issue 1: Eligibility for exemption under Notification No. 04/2006 C.E.The case involved M/s. Intercontinental Polymer Private Limited manufacturing re-processed plastic granules out of waste falling under Chapter 39 of the Central Excise Tariff. The appellant claimed exemption under Notification No. 04/2006 C.E. The appellant argued that the waste used for manufacturing the granules falls under Chapter 39, making them eligible for the exemption. The Tribunal referred to previous judgments and held that the imported goods used by the appellant were waste and scrap of goods falling under Chapter 39, thus qualifying for the exemption.Issue 2: Interpretation of Customs Tariff Act regarding waste classificationThe Department contended that the finished goods were not eligible for exemption as the waste used did not fall under the category specified in the notification. The Tribunal analyzed the Customs Tariff Act and observed that the imported goods were indeed waste and scrap of goods under Chapter 39, meeting the conditions for exemption. The Tribunal emphasized the importance of the phrase 'waste and scrap of goods' in the notification, indicating that the goods must be discarded goods of specific chapters to qualify for the exemption.Issue 3: Time-bar for demandThe appellant argued that the demand for the extended period was time-barred due to the absence of suppression of facts. The Tribunal agreed, stating that the Revenue could have verified the eligibility for exemption from the appellant's declarations in the ER-1 return. Since there was no suppression of facts or mala fide intention, the invocation of the extended period was deemed illegal. The demand was set aside, both on merit and limitation grounds.In conclusion, the Tribunal set aside the impugned orders, allowing the appeal based on the findings that the appellant's imported goods qualified as waste and scrap under Chapter 39 for exemption purposes, and the demand for the extended period was not sustainable due to the absence of suppression of facts. The decision was pronounced on 27.09.2024.