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1994 (4) TMI 151
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....of BOPP films and cleared under Heading 39.15 of Central Excise Tariff Act, 1985 at nil rate of duty in terms of Notification No. 53/86. 2. The respondents hereunder are engaged in the manufacture of BOPP films falling under Heading 39.20 CETA, 1985 and were availing the facility of Modvat credit of duty on the inputs namely, Polypropylene copolymer, Polypropylene monopolymer and Polypropylene compound under Rule 57A. During the period November, 1990 to March, 1991, they cleared waste, scrap and paring of other plastics falling under Heading 39.15 and Polypropylene falling under Heading 39.02 at nil rate of duty. It was observed that there was a high generation of waste vis-a-vis BOPP films and therefore, show cause notices were iss....
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....film is then passed over heated differential speed rolls where it is stretched in the machine direction. This causes the film to thin down without reducing its width. The film so obtained at this stage is monoaxially oriented. For biaxial orientation, subsequent stretching in the transverse directions is accomplished on equipment known as tender frame which consists of two endless chains equipped with gripping clamps mounted on a frame. The film produced is 4000 mm. wide and is collected on mill rolls. These rolls are stored for 72 hours at ambient conditions in maturation area to facilitate stabilisation of physical properties and are cut into various widths through a set of slitting machines comprising mechanical razors and sheer cutters.....
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....tant Collector only on the ground of high percentage of wastage and she has also recorded her finding that the adjudicating authority has not taken into account whether the high wastage could result nor has he relied upon the report from his field office which could clarify as to whether the wastage was really high or otherwise. Further, she has held that the departmental authorities were aware of the fact that waste arises during the course of manufacture of BOPP films as they were visiting the factory of the assessees and inspecting and verifying the percentage of wastage from time to time from the statutory registers. No satisfactory or convincing argument has been put forth by the DR to dislodge this finding of the Collector (Appeals). ....
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....tes. 7. Since in the instant case the waste material is being admittedly utilised for recycling and production of granules as well, therefore, the extent to which it is being so utilised is also required to be kept in mind. 8. In my opinion, the benefit extended by Rule 57D would be available to the appellants only to the extent of material. The so-called waste is actually treated as waste and disposed of as such but the quantity which is reutilised for the purpose of producing granules or otherwise will have to be treated on different footing. It was all the more essential since it has been stated that the granules so produced are also being cleared as such for being sold to independent buyers. 9. In view of the abo....
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....he facility of Modvat Credit of duty on the inputs, viz., Polypropylene, Co-polymer, Polypropylene monopolymer and Polypropylene compound under Rule 57A. During the period from November, 1990 to March, 1991 they cleared waste, scrap and paring of other plastics falling under Heading 39.15 and Polypropylene falling under Heading 39.02 at nil rate of duty. It was observed that there was a high generation of waste vis-a-vis. MOPP films produced during the period 11/90 to 1/91 and 2/91 to 3/91. Show cause notices were issued and confirmed the demand by Assistant Collector on the ground that the provisions of Rule 57D were not applicable as the percentage of wastage was higher than the percentage of final product and that the polypropylene granu....
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....nal product alone can be removed. The goods which is neither inputs as such brought into the factory nor a waste cannot be removed under Modvat Scheme. Each consignment of what is described as cut off by the appellants have to be examined by the Departmental Officers and the case to which such a consignment is put has to be taken into account by such Officers before they can be termed as cut off or waste and scrap. 13. On the other hand, Shri A.N. Haksar, learned Senior Advocate submitted that Modvat credit has been denied by the Assistant Collector only on the ground of high percentage of wastage. But there was no condition or restriction in Rule 57D to deny the benefit on the ground of high percentage of wastage. He said that this....