Duty-paid input condition governs exemption for scrap, parings and waste from P.U. foam manufacture.

Exemption under Notification No. 14/92 was unavailable for scrap, parings and waste generated in the manufacture of P.U. foam sheets and articles because the notification applied only where the relevant waste arose from duty-paid input material. The blocks used as the immediate input for the process were not duty paid, so the statutory condition for the benefit was not met. On that factual basis, the claimed exemption was denied and the impugned order was sustained.

---

---

Issues: Whether scrap, parings and waste arising in the manufacture of P.U. foam sheets and articles from blocks were eligible for the benefit of Notification No. 14/92 dated 1-3-1992.

Analysis: The notification granted benefit where the waste, parings and scrap arose from duty-paid input material. Blocks were found to be subjected to further processing for manufacture of P.U. foam sheets and articles, and no duty had been paid on the blocks used as the immediate input for that process. Since the condition of the notification was not satisfied on the facts, the benefit could not be extended to the waste, parings and scrap generated in that manufacturing stage.

Conclusion: The benefit of Notification No. 14/92 was not admissible to the waste, parings and scrap arising in the manufacture of P.U. foam sheets and articles, and the appeal failed.

Final Conclusion: The impugned order was sustained and the assessee was denied the exemption benefit claimed for the scrap, parings and waste.

Ratio Decidendi: Eligibility under an exemption notification for waste, parings and scrap depends on satisfaction of the condition that the relevant input material is duty paid.

---