2004 (97) ECC 270 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(B)

Shri S.S. Kang, Member (J) and
Shri V.K. Agrawal, Member (T)

Kamakshi Papers (P) Ltd.

Versus

Commissioner of Central Excise, Meerut-II

Appeal No. E/1062/2004-NB(B)

[Arising out of Order-in-Appeal No. 263/2003 dated 23.12.03 passed by Commissioner (Appeals), Customs & Central Excise II, Meerut]

Final Order No. 510/2004-B, dt. 9.6.2004, Certified on 6.7.2004

Exemption (C. Excise)

Notification No. 89/95-CE dt. 18.5.95 -- Wastes, pairings and scrap arising in the course of manufacture of exempted goods from whole of the duty of excise leviable -- The benefit of Notification No. 89/95-CE is not available to the Appellants in respect of waste and scrap of paper as they were availing of the exemption under Notification 5/99-CE where exemption from payment of duty is granted based upon the quantity of clearance.

PRESENT :

Shri Bipin Garg, Adv. for the appellant.

Shri O.P. Arora, SDR for the respondent.

Case Cited :

Vadehra Luminaries v. CCE Delhi-I, 2004 (93) ECC 259 (CESTAT)................ [Paras 3 & 4]

Per : V.K. Agrawal

M/s. Kamakshi Papers (P) Ltd., have filed this Appeal against Order-in-Appeal No. 263/2003 dated 23.10.03 by which the Commissioner (Appeals) has denied the benefit of Notification No. 67/95-CE and Notification No. 89/95 dated 18.5.95.

2. Shri Bipin Garg, learned Advocate submitted that the Appellants manufacture newsprint paper, writing and printing paper and Kraft paper; that newsprint carries nil rate of duty in the Schedule to the Central Excise Tariff Act itself; that during the process of manufacture of these papers, some quantity of broken and cut pieces of papers called waste and scrap is generated which falls under sub-heading 4702.90 of the Tariff; that such waste and scrap is captively consumed by the Appellants in the manufacture of their final products. Learned Advocate, further, submitted that the Appellants are not pressing their Appeal against the denial of benefit of Notification No. 67/95-CE dated 16.2.95; that the Commissioner (Appeals) has denied the benefit of Notification No. 89/95 on the ground that they were also manufacturing excisbale goods which were exempted from payment of duty under a Notification where exemption from the whole of the duty is granted based upon the value or quantity of clearances made in a financial year; that this finding has been given by the Commissioner as they were availing exemption under Notification No. 6/2000-CE (S. No. 77) in respect of Kraft papers; that as per condition No. 15 of the Notification No. 6/2000, this exemption from payment of duty is available only upto first clearance of an aggregate quantity not exceeding 2500 MT. Learned Advocate contended that Notification No. 6/2000 is not a notification where exemption from whole of the duty of excise is granted based upon the value or quantity of clearance made in a financial year; that Notification No. 6/2000 (S.No. 7) exempts paper and paper board or article made therefrom upto a specific limit in a financial year and the Central Excise duty is payable after exceeding the specific quantity; that they have not exceeded the specified quantity. Alternatively, the learned Advocate claimed the benefit of Notification No. 10/96-CE dated 23.7.96 which exempts all excisable goods from payment of duty if these are consumed within the factory of their production in the manufacture of goods specified in Column 3 of the table; that S. No. 11 of the table annexed to Notification No. 10/96 mentions newsprint and as such the waste and scrap used captively by them in their factory has to be allowed exemption from payment of duty under Notification No. 10/96.

3. Countering the arguments Shri O.P. Arora, learned Senior Departmental Representative submitted that the Notification No. 6/2000 (S. No. 77) is a notification granting exemption based upon the value or quantity of clearance made in a financial year; that issue has been decided by the Appellate Tribunal in the case of Vadehra Luminaries v. CCE Delhi-I, 2004 (93) ECC 259 (CESTAT) : 2004 (62) RLT 378 (CESTAT); that accordingly, the benefit of Notification No. 89/95 is not available to them; that Notification No. 10/96 has not been claimed by the appellants before the Adjudicating Authority and therefore it has not been examined whether the conditions of the Notification are satisfied by them.

4. We have considered the submissions of both the sides. Notification No. 89/95-CE dated 18.5.95 exempts -- wastes, pairings and scrap arising in the course of manufacture of exempted goods from whole of the duty of excise leviable thereon, provided that waste pairings and scrap is not cleared from a factory in which any other excisable goods other than exempted goods are also manufactured. As per Explanation to said Notification `exempted goods' means excisable goods which are chargeable to nil rate of duty or are exempted from the whole of the duty of excise by any other Notification not being a Notification where exemption from whole of the duty of excise is granted based upon the value of quantity of clearance made in a financial year. The appellants are availing the benefit of Notification No. 6/2000 (S. No. 77) which exempts paper and paper board or article made therefrom upto first clearance of an aggregate quantity not exceeding 2500 MT. It is thus clear that Notification No. 2/2000 (S. No. 77) is providing exemption based on quantity of clearance as it limits the exemption upto a particular quantity. As rightly submitted by the learned Senior Departmental Representative this issue has been decided by the Tribunal in the case of Vadehra Luminaries (supra) wherein the Tribunal has considered whether Notification No. 5/99-CE (Serial No. 70) which exempts goods upto an aggregate value of clearance upto Rs. 100 lakhs in a financial year is a notification granting exemption based upon the value of the clearances. The Tribunal has held that value of clearance effected under Notification No. 5/99 are to be treated as clearance after availing exemption based on value of clearance. We, therefore, hold that the benefit of Notification No. 89/95-CE is not available to the Appellants in respect of waste and scrap of paper as they were availing of the exemption under a notification where exemption from payment of duty is granted based upon the quantity of clearance. We also observe that the Commissioner (Appeals) has not considered the availability of benefit of Notification No. 10/96 on the ground that the Appellants had not satisfied that condition of the Notification. We observe that at the adjudication stage the Assistant Commissioner had extended the benefit of Notification No. 89/95 to the Appellants and had dropped the demand of duty demanded from them in the show cause notice. Therefore, there was no reason for the Appellants to claim the benefit of Notification No. 10/96 before the Adjudicating Authority. It is a settled law that the benefit of Notification can be claimed at any stage of the proceeding. However, as it is to be examined as to whether the conditions specified in the Notification has been fulfilled before granting the benefit thereof, we remand the matter to the Adjudicating Authority with the direction to examine whether the benefit of Notification No. 10/96-CE dated 23.7.96 is available to the Appellants after affording an opportunity of hearing to them. We also direct the Appellants to make their submissions before the Adjudicating Authority in this regard within a month of receipt of this order. The Appeal is disposed of in these terms.

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