PAHARPUR INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The dispute is about eligibility of plastic pouches produced by the appellant for exemption under Notification No. 4/97. The exemption is subject to the following condition.

(2.) Under the impugned order, the exemption has been denied to the goods in question on the ground that its manufacture was not by M/s. Paharpur Industries Ltd., but was actually by M/s. HGF Laminates and that M/s. Paharpur Industries Ltd. is a dummy of M/s. HGF Laminates.

(3.) The contention of the appellant is that the question as to who is the real manufacturer is wholly irrelevant for determining the dispute. During the hearing of the case today, learned Senior Counsel representing the appellants pointed out that the exemption has only one condition i.e. no Modvat credit should be availed of in respect of the duty paid on the inputs used in the manufacture of the goods. The question as to who is the manufacturer is completely irrelevant for the exemption. Learned Senior Counsel further pointed out that in the present case, the process of manufacture was like this. Granules were purchased from the market and films made out of them. Modvat credit was taken in respect of the granules and duty was paid on the film. The film so cleared after payment of duty was used for manufacture of pouches. No Modvat credit was taken of the duty paid on the film, which is the input. According to the learned Senior Counsel, in these facts, the requirement of the exemption notification is fully satisfied i.e. "no credit of the duty paid on the inputs used in the manufacture of such goods has been availed of by the manufacturer". The position would be the same, irrespective of whether M/s. Paharpur Industries Ltd., or M/s. HGF Laminates is treated as a manufacturer. He also submitted that this issue is covered in favour of the assessee by the decision of this Tribunal in the case of Shivalik Agro Poly Products Ltd. v. CCE, Chandigarh - 1999 (114) E.L.T. 760.