2019 (2) TMI 1482

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....ation are appellant assessee is the manufacturer of PVC Pipes, HDPE and LDPE pipes for which he consumes raw materials like PVC resin, master batch and chemicals, LDPE and HDPE granules. As and when they clear LDPE pipes for agricultural and horticultural applications, as a part of drip irrigation system, they classify the said LDPE pipes under chapter heading 8424 9000 as "Parts of mechanical appliances of a kind used in agriculture or horticulture" and claim exemption from payment of duty of excise under S.No. 70 of notification No. 3/2005-CE, dt. 24.02.2005. While clearing the said goods on claiming the exemption, having availed CENVAT Credit of duties paid on inputs, input services and capital goods, they make a payment of 10% of the va....

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....dings. 3. Ld. Counsel submits that the findings of the lower authorities are totally incorrect inasmuch LDPE pipes manufactured by the appellant are classifiable under chapter 39 only and are liable to Central Excise duty but in some situations wherein the LDPE pipes are manufactured along with some implements like sprayer etc., they get classified under chapter 8424 9000 and are used as agricultural or horticultural appliances. It is his submission that when end use of pipes is not known, it would merit classification only under chapter 3917 and attracts central excise duty. He would submit that whenever appellant assessee is not sure of the end use of LDPE pipes, they have paid duty hence allegation of the department that inputs (LDPE gr....

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....ipes. As regards department's appeal, it is his submission that the first appellate authority has erred in extending the benefit of clearing the LDPE pipes without payment of duty as well as with payment of duty and not upholding the order of the adjudicating authority for reversal of CENVAT Credit on the inputs and input services which are exclusively used for manufacturing of LDPE pipes. 5. On careful consideration of the submissions made, we find that appellant assessee consumes LDPE granules, input services, common inputs and capital goods for manufacturing of LDPE pipes. It is also undisputed that appellant when he clears the LDPE pipes to consumers for use the same for agricultural and horticultural purposes, claims the exemption und....