COLLECTOR OF CENTRAL EXCISE Vs. BHARAT SEATS LTD.

JUDGEMENT

(1.) IN this appeal preferred by the Revenue, the issue involved is whether the benefit of Notification No. 53 /88 -C.E., dated 1 -3 -1988 is available to the waste, paring and scrap of plastics obtained during the process of manufacture of P.U. Foam Paddings.

(2.) SHRI K. Srivastava, learned SDR, submitted that once the chemical mixed in appropriate proportion are placed in the tunnel of the foaming machine, the chemicals lose their identity completely and the product of Chapter 39 comes into existence at that stage; that whatever wastage of P.U. Foam arises, that arises only after that stage; that as the appropriate duty has not been paid at that stage, the benefit of nil rate of duty to waste, parings and scrap of P.U. Foam cannot be extended under Notification No. 53/88. He, further, submitted that it is settled law that a notification has to be interpreted strictly and if the condition specified in the notification is not satisfied, its benefit can not be allowed. He also mentioned that there is another Notification No. 54/88 which provides a concessional rate of duty to waste, parings and scrap of flexible polyurethene foam, and if the benefit of Notification No. 53/88 is extended to the impugned product, it will negate the Entry No. 6 of Notification No. 54/88; that a notification has not to be interpreted in such a manner that another notification is rendered nugatory.

(3.) COUNTERING the arguments, Shri Naveen Mullick, the learned Advocate, submitted that the waste etc. has occurred from the goods which are duty paid; that the waste gets generated during the manufacture of final products and as such benefit of Notification No. 53/88 is available to the waste, parings and scrap of plastics falling under Heading 39 15 of the Schedule to the Central Excise Tariff Act. He, further, submitted that entries in Notification No. 53/88 (Sri. No. 24) and in Notification No. 54/88 (Sri. No. 06) are not identical as was held by the Tribunal in Jain and Jaina Foam Ltd. v. C.C.E., New Delhi, Order No. 1257 -1258/98 -C, dated 21 -12 -1998. The Tribunal observed in that decision that "both the Notifications cover waste, parings and scrap falling under sub -heading 39.15. Notification No. 53/88 is wider in scope since it covers such waste, etc. of "plastics" whereas the Notification No. 54/88 is limited to such waste, etc. of "Polyurethene Foam." Therefore, where the 'description of goods' is covered under the later notification, the former notification would automatically cover the same." The learned Counsel also contended that the first product which comes out is waste, etc. and he relied upon the decision in the case of C.C.E., Meerut v. Maruthi Foam (P) Ltd. reported in 1996 (85) E.L.T. 157 in which the benefit of Notification No. 53/88 was extended to top skin, bottom skin and side skin cut from P.U. Foam blocks. He also referred to decision in the case of C.C.E. v. Indian Petro Chemicals, reported in 1997 (92) E.L.T. (S.C.) wherein it was held that if two exemption notifications were applicable, benefit of the notification which was more beneficial to the assessee can be given.