PARVENU INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants are a small scale industrial unit engaged in the manufacture of 'Plastic woven sacks'. They convert PP granules (raw material) into strips (intermediate), which are then used in the manufacture of sacks (final product). The final product is specified for SSI benefit, but the intermediate has been expressly excluded from the coverage of the scheme. The relevant SSI Notification is Notification No. 8/2003 -CE dated 1.3.2003 as amended. In the impugned order, ld. Commissioner has demanded duty of over Rs. 16 lakhs on plastic strips manufactured and captively consumed by the appellants during the period 1.4.2005 to 2.6.2006 and has also charged interest thereon. He has also imposed penalty of Rs. 4 lakhs on the assessee. The assessee's claim under Notification No. 67/95 -CE for exemption from payment of duty on the plastic strips was not accepted by the Commissioner.

(2.) AFTER examining the records and hearing both sides, we note that the appellants are claiming the benefit of Notification No. 67/95 -CE in respect of the plastic strips, which were manufactured and captively used in the manufacture of plastic sacks. The case of the Revenue is that, as the strips were used in the manufacture of sacks which were exempt from payment of duty under the SSI Notification, the benefit of Notification No. 67/95 -CE would not be available to the assessee. This claim of the Department is based on the proviso to the main paragraph of Notification No. 67/95 -CE, which reads as under:

(3.) AFTER considering the submissions, we are impressed with the argument advanced by ld. Counsel. However, at this stage, we are not embarking on further interpretation of the Notification. Suffice to say, the appellants have made out prima facie case against the demand of duty. Accordingly, there will be waiver of predeposit and stay of recovery in respect of the duty and penalty amounts.