2014 (12) TMI 315

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....he impugned order, the learned lower appellate authority has set aside the demand of duty confirmed by the adjudicating authority in respect of waste and scrap of plastics which has arisen in the course of manufacture of BOPP films by the respondent, M/s Cosmos Films Ltd. Aggrieved of the same, the Revenue is before us. 3. Briefly stated, the facts relevant to the case are : 3.1 M/s. Cosmos Films Ltd., Waluj, Aurangabad are manufacturers of BOPP films falling under CETH 39.20. During the manufacture, waste and scrap of these films arise as a byproduct and these are classifiable under CETH 39.15. Vide serial No. 24 of the table annexed to Notification 53/88-C.E., waste arising from manufacture of plastic products are exempt f....

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.... as final products and, therefore, Rule 57D has no application. Inasmuch as the waste and scrap has been manufactured out of inputs on which Cenvat credit has been taken, they cannot be considered as having been manufactured from inputs on which duty has been paid. He relies on the decision of the Tribunal in the case of Commissioner of Central Excise v. Gunnam Subbarao Investments (P) Ltd. - 2003 (159) E.L.T. 1167 wherein it has been held that in respect of scrap which emerged during the process of manufacture from modvatable inputs, exemption under Notification 53/88 would not be available. 4. The learned counsel for the respondent, on the other hand, submits that in respect of a show cause notice dated February 23, 1989, a propos....

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....f any duty paid raw material is contained in the waste, on which there is no excise duty liability. Therefore, he submits that the impugned order needs to be upheld and the appeal dismissed. 5. We have carefully considered the submissions made by both the sides. 5.1 As regards the contention of the Revenue that once credit has been taken, the inputs become non-duty paid, this contention is not based on any provisions of law. Nowhere in the Central Excise Act or Rules, it is stated that when credit is taken, the input becomes non-duty paid. Payment of duty is a question of fact and once duty is paid, the product remains duty-paid and that fact cannot be erased or obliterated on what happens subsequently. Therefore, as rightly....