Plastic scrap exemption under Notification No. 14/92-C.E. applies when scrap arises from duty-paid plastic granules.

Plastic film scrap arising during manufacture from duty-paid plastic granules qualified for exemption under Notification No. 14/92-C.E. because the relevant condition was that the waste and scrap should emerge from goods on which excise duty or additional customs duty had already been paid. The fact that the finished product itself was not duty-paid did not disqualify the scrap from the nil-rate benefit. On that basis, the notification applied to polyester/polypropylene plastic film scrap, and the Revenue's challenge was rejected.

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Issues: Whether polyester/polypropylene plastic film scrap was entitled to exemption under Notification No. 14/92-C.E. dated 1-3-1992 when it arose during manufacture from duty-paid plastic granules.

Analysis: The notification granted nil rate of duty to waste, pairing and scrap of plastic arising from goods falling under Chapter 39 or any other Chapter of the Central Excise Tariff Act, 1985 on which duty of excise or additional customs duty had already been paid. The Revenue did not dispute that the inputs used for manufacture were duty-paid plastic granules. The mere fact that a distinct final product emerged without duty payment did not defeat the notification, because the relevant condition was that the waste and scrap should arise from duty-paid goods. The waste and scrap arose in the course of manufacture of the final product, and the statutory condition stood satisfied.

Conclusion: The benefit of Notification No. 14/92-C.E. dated 1-3-1992 was available to the assessee, and the Revenue's appeal was rejected.

Ratio Decidendi: Where waste and scrap of plastic arise during manufacture from duty-paid inputs falling under Chapter 39, exemption cannot be denied merely because the finished product itself was not duty-paid.

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