TALASH PLASTOPACKS Vs. COMMISSIONER OF CENTRAL EXCISE, CALICUT

JUDGEMENT

(1.) THE appellants manufacture disposable plastic containers. They obtain duty paid plastic granules and avail Modvat credit on such duty paid inputs. During the process of manufacture of the final product (plastic containers) certain reusable plastic scrap generates. The appellants reuse the scrap captively. Such scrap is exempted from payment of duty under Notification No. 67/95 -C.E., dated 16 -3 -95 which exempts goods captively consumed. The appellants maintain detailed account of inputs that are contained in the reusable scrap. The appellants availed of Notification No. 8/2000 -C.E. till they reached Rs. One crore value of clearances on 21 -8 -2000.

(2.) HEARD both sides.

(3.) THE short issue that needs to be settled is whether an unit availing of small scale exemption be allowed to take credit of duty paid on the inputs that have gone into the production of scrap which itself is exempt from duty. The appellants relied on the decision of the Tribunal in the case of Aditya Cement [2002 (149) E.L.T. 650 (Tri.)] wherein the Tribunal held that credit cannot be denied on the ground that inputs were used in the manufacture of intermediate goods which were exempted from duty. The appellants also relied upon the decision of the Tribunal in the case of Rolls Tubes [2002 (149) E.L.T. 747 (Tri.)] wherein the Tribunal held that Modvat credit cannot be denied when the waste and scrap is cleared on payment of duty. A similar opinion was expressed in the case of Hindalco Industries Ltd. [2002 (150) E.L.T. 1218 (Tri.)].