PVC container exemption upheld where market-purchased tubing was treated as duty-paid and eligible under the plastic materials notification.

PVC containers made from PVC lay flat tubings were treated as articles made from primary plastic materials, so the exemption under Notification No. 132/86 applied. The conversion of duty-paid lay flat tubings into containers through an intermediate manufacturing stage did not take the goods outside the exemption. Goods purchased from the market were presumed duty-paid, and the Revenue had to disprove that character. On the record, the Revenue failed to rebut the presumption, so the exemption was sustained and the challenge by the Revenue failed.

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Issues: (i) Whether PVC containers manufactured from PVC lay flat tubings were entitled to exemption under Notification No. 132/86. (ii) Whether the duty-paid character of the purchased plastic material was to be presumed and the burden to prove otherwise lay on the Revenue.

Issue (i): Whether PVC containers manufactured from PVC lay flat tubings were entitled to exemption under Notification No. 132/86.

Analysis: The purchased lay flat tubings were found to have been produced from duty-paid PVC resin. The conversion of such tubings into containers was treated as manufacture through an intermediate product and did not alter the character of the goods as articles made from primary plastic materials. Prior decisions relied upon by the Tribunal supported the view that such articles fell within the scope of the exemption.

Conclusion: The exemption was available, and the assessee was entitled to the benefit of Notification No. 132/86.

Issue (ii): Whether the duty-paid character of the purchased plastic material was to be presumed and the burden to prove otherwise lay on the Revenue.

Analysis: The record showed that the tubings were purchased from the market and the Assistant Collector himself noted their origin from duty-paid PVC resin. Goods bought from the market are ordinarily presumed to be duty-paid unless their non-duty-paid character is established. The Revenue did not displace that presumption.

Conclusion: The burden was on the Revenue, and it failed to prove that the material was not duty-paid.

Final Conclusion: The orders granting exemption were sustained and the Revenue's challenge failed.

Ratio Decidendi: Where market-purchased plastic inputs are shown to originate from duty-paid resin, the burden lies on the Revenue to disprove duty-paid character, and articles made through an intermediate plastic product remain eligible for exemption as products made from primary plastic materials.

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