Prince Swr Systems Ltd. Vs. Commissioner of Central Excise

Prince Swr Systems Ltd. vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided May 09, 2006

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Citation: sooperkanoon.com/42607
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: A T K.K.
Decided On: May 09, 2006
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Prince Swr Systems Ltd.

Respondent

Commissioner of Central Excise

Legal References

Reported In: (2006)(108)ECC458

Excerpt

1. the appellant are engaged in the manufacture of pvc rigid pipes and fittings falling under chapter no. 39. the raw-material used for manufacture of these pipes is pvc granules. during the course of manufacture of pipes certain waste materials in the form of pulp arises which is sent by the appellants to job workers for re-generation of granules. they have intimated the judicial asstt. commissioner about their intention to send this waste materials for generation of granules and subsequently removed such waste under rule 56f(4) challan. the waste material are cleared without payment of duty. they were however, issued a show cause notice stating that materials could not have been cleared under rule 57f(4) procedure and that they were required to pay duty on said waste material at the applicable rate.2. the appellant submitted that they are duly covered by rule 57f (4) procedure as waste was used for regeneration of pvc granules which in turn was again used for the manufacture of their finished products i.e.pvc rigid pipes. in support thereof they cited the cegat decision on the identical issue in the case of narmada plastics (p) ltd. v.commissioner of central excise 2004 (178) e.l.t. 806 (tribunal) wherein it was held that then benefit of rule 57f(3) is not deniable if after use of plastic granules in manufacture of hdpe/pp fabrics, left over materials sent out under said rule, for being reprocessed into granules and on return to be used in manufacture of fabrics. a similar issue was decided by the larger bench in the case of wyeth laboratories ltd. v.collector of central excise 3. the learned j.d.r. on the other hand submits that in this case the appellant have not taken the permission required under rule 57f(4) and necessary challan were not submitted along with rt-12 return and therefore there was a wilful intention to evade the duty and that the rule 57f(4) procedure was not available in respect of waste materials which should have been cleared on payment of.....

Full Judgment

1. The appellant are engaged in the manufacture of PVC Rigid Pipes and fittings falling under chapter No. 39. The raw-material used for manufacture of these pipes is PVC granules. During the course of manufacture of pipes certain waste materials in the form of pulp arises which is sent by the appellants to job workers for re-generation of granules. They have intimated the Judicial Asstt. Commissioner about their intention to send this waste materials for generation of granules and subsequently removed such waste under Rule 56F(4) challan. The waste material are cleared without payment of duty. They were however, issued a show cause notice stating that materials could not have been cleared under Rule 57F(4) procedure and that they were required to pay duty on said waste material at the applicable rate.

2. The appellant submitted that they are duly covered by Rule 57F (4) procedure as waste was used for regeneration of PVC granules which in turn was again used for the manufacture of their finished products i.e.

PVC rigid pipes. In support thereof they cited the cegat decision on the identical issue in the case of Narmada Plastics (P) Ltd. v.Commissioner of Central Excise 2004 (178) E.L.T. 806 (Tribunal) wherein it was held that then benefit of Rule 57F(3) is not deniable if after use of plastic granules in manufacture of HDPE/PP fabrics, left over materials sent out under said rule, for being reprocessed into granules and on return to be used in manufacture of fabrics. A similar issue was decided by the larger Bench in the case of Wyeth Laboratories Ltd. v.Collector of Central Excise 3. The learned J.D.R. on the other hand submits that in this case the appellant have not taken the permission required under Rule 57F(4) and necessary challan were not submitted along with RT-12 return and therefore there was a wilful intention to evade the duty and that the Rule 57F(4) procedure was not available in respect of waste materials which should have been cleared on payment of duty.

4. I have considered the submission. I find that the appellant's case is squarely covered by the Cegat decision in the case of Narmada Plastics (P) ltd. cited supra wherein it is clearly stated that scrap and waste can be removed for reprocessing and return for further manufacture of goods under Rule 57F(3). As regards non-taking of permission once the appellant have intimated the department and the department has not specifically refused to grant the permission the permission is to be considered as implied. Since the inputs were removed under the challan, mere non submission of the challan alongwith the RT-12 which according to the appellant is not the requirement will not result results in demand of duty or non applicability of Rule 57F(4) procedure. It is not the department's case that the waste material cleared were not properly accounted for or what was sent outside the factory did not came back after re-processing.

5. In view of above I set aside the order of the Commissioner (Appeal) and allow the appeal with consequential reliefs.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Prince Swr Systems Ltd. vs Commissioner of Central Excise Same Subject Excise Same Judge A T K.K.