SHARADA POLYMERS Vs. CCE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we proceed to deal with the appeal.

(2.) THE appellants were engaged in the manufacture of polypropylene (PP) tapes and sacks of Chapter 39 of the CETA Schedule during the period of dispute [October 2004 to March 2005]. In a show -cause notice covering the said period, the department demanded duty on the PP tapes manufactured and captively consumed in the manufacture of sacks and also proposed to impose penalty. In their reply to the notice, they contested the demand of duty on the ground of SSI exemption. In adjudication of the dispute, the Joint Commissioner of Central Excise confirmed the demand of duty of Rs. 6,14,313/ -against the assessee under Section 11A of the Central Excise Act with interest thereon under Section 11AB of the Act and also imposed on them a penalty of Rs. 4.00 lakhs under Rule 25 of the Central Excise Rules, 2002. The assessee preferred appeal to the Commissioner (Appeals) and the same was disposed of by the impugned order, whereby the case was remanded to the adjudicating authority for re -quantification of duty after revaluation of the goods in terms of the relevant provisions of the SSI Notification (No. 8/2003 -CE) as also for consequential redetermination of the quantum of penalty.

(3.) IT is submitted by learned Counsel for the appellants that, on the facts of the case, they are eligible for the benefit of Notification No. 221/86 -CE dated 1.3.1986 as well as the Board's Section -37B Order No. 8/92 dated 24.9.92 for the aforesaid period of dispute. Learned Counsel has also referred to the Madhya Pradesh High Court's judgment in Raj Packwell Ltd. v. Union of India , wherein HDPE strips/tapes were classified under heading 39.20 and SH 3920.32 of the CETA Schedule and held not classifiable under Heading 54.06. The High Court also classified HDPE sacks under Heading 39.23 and SH 3923.90. It is submitted that, by virtue of this classification, the benefit of the above Notification is available to PP tapes manufactured and captively consumed by the appellants during the above period. Learned SDR reiterates the findings of the authorities below and particularly submits that, during the period of dispute, the final product of the appellants were not classified under Heading 54.06 and therefore the benefit of the Notification would not be available to them.