MODERN EXTRUSION Vs. COMMISSIONER OF C. EX., BELGAUM

JUDGEMENT

(1.) THIS appeal has been filed against the Order -in -Appeal No. 239/2005 dated 26 -10 -2005, passed by the Commissioner of Central Excise, Mangalore.

(2.) THE appellants are manufactures of fabrics. In the process, intermediate products HDPE Strips arise. HDPE Strips are cleared to job worker for manufacture of fabrics and sacks. The fabrics and sacks were returned from the job worker and cleared for home consumption without payment of duty by availing benefit of exemption Notification No. 8/2002 -C.E., dated 1 -3 -2002 and 8/2003 -C.E., dated 1 -3 -2003. The Revenue proceeded against the appellants on the ground that the strips of plastic emerging as intermediate products and sent for job work for further manufacture of fabrics and sacks is not eligible for exemption under Notification No. 8/2002 -CE dated 1 -3 -2002. The duty demanded in the show cause notice was confirmed by invoking proviso to Section 11A of the Central Excise Act, 1944. Equal penalty under Section 11AC of Central Excise Act, 1944 and Rule 27 of the Central Excise Rules, 2002 was imposed. Interest under Section 11AB was demanded. The appellants approached the Commissioner (Appeals) who passed the impugned order upholding the order of the Original Authority. The appellants are highly aggrieved over the impugned order.

(3.) SHRI M.S. Nagaraja, learned Advocate appeared for the appellants and Shri Anil Kumar, learned JDR appeared on behalf of the Revenue. The learned Advocate urged the following points : -