COMMISSIONER OF CENTRAL EXCISE Vs. PADMINI POLYMERS

JUDGEMENT

(1.) These are two appeals one is filed by Revenue against the impugned order dropping the proceedings initiated against M/s. Padmini Polymers Ltd. and holding that an amount of Rs. 50 lakhs deposited on 22 -10 -97 cannot be appropriated towards the duty demanded in the SCN and also dropping proceedings against Shri Vivek Nagpal and Shri R.K. Chawla. The assessec has filed cross appeal against confiscated raw material and its redemption on payment of Rs. 30,000/ - as fine in lieu of confiscation and imposition of penalty of Rs. 50,000/ -. Since the two appeals arise out of the same order, they were heard together and are being disposed of by this common order.

(2.) The facts of the case briefly stated are that M/s. Padmini Polymers are engaged in the manufacture of articles of plastics falling under Chapter sub -heading 3923.90 of the Central Excise Tariff Act, 1985. It was alleged that they were wrongly availing the benefit of duty free clearances of the goods in terms of Notification No. 4/97, dt. 1 -4 -97. Scrutiny of the seized records, classification list/declaration it was noticed that M/s. Padmini Polymers had described the goods as articles for the convenience of packing goods of plastic and other items, the rate of duty applicable had been shown as Nil. A SCN was issued to M/s. Padmini Polymers and others asking them to explain as to why Central Excise Duty amounting to Rs. 7,69,90,751/ -should not be demanded and recovered from them and why they should not be asked to pay interest @ 20% on delayed payment of Central Excise Duty and why penalty should not be imposed.

(3.) Before ld. Commissioner while adjudicating the case, the appellants in reply to the SCN contended that master batch was used for imparting colour to the containers required by them while PP bags were used as packing material; that these were not principal raw materials, therefore, they were not required to be entered by M/s. Padmini Polymers in Form IV; that only such quantity of the master batch and PP bags as were being used in the manufacture of containers cleared after payment of duty were shown in the RG. 23A Part I.