TECHNO CABLES PVT. LTD. Vs. CCE

JUDGEMENT

(1.) IN this appeal filed by M/s. Techno Cables (P) Ltd., the matter relates to the duty liability on the plastic waste and scrap removed for job workers when such waste and scrap had arisen during the course of manufacture of plastic pipes and fittings from the duty paid modvated plastic granules. When the waste and scrap was removed to their job workers, no duty was paid. The Asst. Commissioner of Central Excise took a view that the plastic waste and scrap arising out of the processing of the modvat availed inputs were neither inputs as such nor were inputs which had been partially processed and thus, such removal was not covered by the provisions of Rule 57F(3) of the Central Excise Rules, 1944 (hereinafter referred to as the 'Rules'). He held that appropriate duty as applicable to waste and scrap of plastics was liable to be paid and he confirmed the demand of Rs. 45,400/ -. Relying upon the Tribunal's decision in the case of Shriram Refrigeration Indus. v. CCE, Hyderabad , the Commissioner of Central Excise (Appeals) held that the waste and scrap in question could be removed only after payment of duty. He confirmed the view taken by the adjudicating authority.

(2.) THE matter was heard on 23.1.2001 when Shri K.R. Natarajan, advocate, submitted that the appellants were engaged in the manufacture of telephone cables. Their duty paid raw material was plastic granules and sheets. They were availing of the benefit of modvat credit in respect of the duty paid on the plastic granules and sheets and utilising the same towards payment of duty on telephone cables. In the process of manufacture of telephone cables, the plastic scrap was generated which was sent to their job workers to convert the same into granules. No duty was paid at that stage. The granules brought back were re -used in the manufacture of cables which were then cleared on payment of duty. According to the Department, the duty should have been paid on plastic wastes and scrap before their removal to the job workers. According to the learned advocate, the matter was covered by the Tribunal's Larger Bench decision in the case of Wyeth Laboratories Ltd. v. CCE, Bombay .

(3.) WE have carefully considered the matter. The appellants were engaged in the manufacture of telephone cables (final products), and were using duty paid plastic granules (inputs) in the manufacture of such final products. They were availing of the benefit of modvat credit in respect of the central excise duty having been paid on their inputs. In the case of manufacture of final products, certain waste and scrap of plastics was generated. Modvat credit had already been availed of in respect of the inputs used in the manufacture of final products (out of which the waste and scrap arose) for discharging duty liability on the resultant final products. In such circumstances for duty liability on the waste and scrap (which were otherwise dutiable under Heading 39.15 of the Central Excise Tariff), reference may be made to the Tribunal's decisions in the case of Siemens Ltd. v. CCE, Calcutta and Bajaj Tempo Ltd. v. CCE, Pune 1995 (10) RLT 107 (T).