ORDER
T. Anjaneyulu, Member (J)
1. Heard both sides.
2. The Department is in appeal aggrieved by the Order dated 30-10-2003 passed by the Commissioner of Central Excise (Appeals), Mumbai.
3. M/s. Star Plastics are manufacturers of plastic articles falling under Chapter 39.15 of the Central Excise Tariff Act, 1985. They were issued Show Cause-cum-Demand Notice amounting to Rs. 60,117.45 on plastic waste and scrap falling under Heading 39.15 cleared by them during the period October 1993 to February 1994 on the ground that waste was generated while processing the inputs on which Modvat credit was availed by the respondents. The waste was required to be cleared on payment of duty in terms of the provisions of Rule 57F(4).
4. The Adjudicating Authority, vide his Order-in-Original dated 24-6-2003, confirmed the demand under Section 11AC of the Central Excise Act and also imposed penalty of Rs. 30,000/- under Rule 173Q of the Central Excise Rules. Thereupon, on filing appeal by the assessee, the Commissioner of Central Excise (Appeals), Mumbai, had set aside the Order-in-original and allowed the appeal. Hence this appeal by the Department.
5. The main contention of the Department is that the Notification No. 14/92, dated 1-3-1992, under which exemption is claimed, is not applicable to the instant case. The Department reply upon the case of Collector of Central Excise, Vadodara v. M/s. Dhiren Chemical Industries . It is observed in this decision that “Notification exempting finished goods if made from materials on which the appropriate amount of duty of excise has already been paid”, the exemption will not be applicable if the inputs are exempted from excise duty or are subject to Nil rate of duty.
6. The contention of the Id. Counsel for the appellants is that the proposition held by the Supreme Court is not applicable to the instant case since they have already availed Modvat credit on the inputs, which goes to show that the inputs are duty paid and not exempted one. Further, the Id. Counsel for the appellants rely upon the case of Navyug Laminates v. CCE, Chandigarh , wherein the Notification No. 14/92-C.E. was directly issued in that case. It is observed that taking of Modvat credit does not make inputs non duty paid. The question of dutiability on waste arising from goods on which Modvat credit under Rule 57C of the Central Excise Rules, 1944 has not been availed, it is held that benefit of Notification 14/92-C.E. is available.
7. This apart, they have relied number of decisions on the same proposition, which have been cited in the Order-in-Appeal. All the above decisions squarely cover the matter in favour of the assessee. Therefore, I find no merits in Revenue appeal, accordingly, appeal is dismissed.
(Pronounced in Court)