1996 (8) TMI 224

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....rnani, JDR, for the Respondents. [Order per : J.H. Joglekar, Member (T)]. -  For disposal of the appeal, it is necessary to understand how the final product viz. `Polyurethane Sandwich Panel' comes into existence. Shri R.K. Habbu, Ld. Advocate informed us that the entire operation is conducted in a single machine. The three inputs mentioned in the dispute, viz. (i) Freon 11, (ii) Di-iso....

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.... dated 1-3-1986 in which it was stipulated that this exemption was available provided that the articles of plastics were produced out of foam on which appropriate duty of excise had been paid. The dispute involves denial of Modvat credit on M.D.I. and Polyol, the two products out of three products mentioned above, on the ground that the final product, viz. `Polyurethane Sandwich Panels' were exemp....

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....rate existence apart from being an inherent part of the final goods which were exempted from payment of duty. 4. We have carefully considered the submissions made by both the sides. The literature indicates that the Polyurethane foam comes into existence inside the metal skin formed by two metal sheets. Thus such foam comes into existence along with the final goods viz. `Polyurethane Sandw....

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....t comes out which is not dutiable. The earlier proceeding in form of stay order shows that the duty was levied and collected on the Polyurethane foam on the basis of approved classification list. In our opinion, the department cannot adopt two stands at one time. They cannot collect duty on a product in which admittedly duty-paid inputs are contained and at the same time deny the status of the fin....