TMI Blog2014 (12) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court of India] by taking credit, the inputs do not become non-duty paid. The very fact that credit has been allowed itself is a proof that duty has been paid on the inputs and without payment of duty, no credit can be taken. Therefore, benefit of Notification 53/88 cannot be denied on waste and scrap of plastics manufactured from duty-paid inputs. - Plastic waste and scrap arising in the course of BOPP films cannot be considered as a final product and it is only a byproduct and therefore, provisions of Rule 57D is applicable to the facts of the present case and the respondent has rightly taken the credit on the inputs contained in the waste and scrap of plastics which has arisen as byproduct in the course of manufacture of BOPP fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing under CETH 39.20. During the manufacture, waste and scrap of these films arise as a byproduct and these are classifiable under CETH 39.15. Vide serial No. 24 of the table annexed to Notification 53/88-C.E., waste arising from manufacture of plastic products are exempt from duty if they are manufactured from goods falling under Chapter 39 or any other Chapter on which the Central Excise duty or the additional duty of customs, as the case may be, has already been paid. The Revenue was of the view that inasmuch as these waste and scrap has been manufactured out of inputs on which duty has been paid and such duty paid on the inputs has been taken as credit by the respondent, the condition of exemption is violated. In other words, it is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during the process of manufacture from modvatable inputs, exemption under Notification 53/88 would not be available. 4. The learned counsel for the respondent, on the other hand, submits that in respect of a show cause notice dated February 23, 1989, a proposal was made by the Revenue for seeking reversal of credit taken and the proceedings were dropped by the Assistant Commissioner. He submits that the adjudicating authority observed in the said order while dropping the demand, that in view of the Tribunal s order in the case of MRF Ltd. v. Collector of Central Excise - 1999 (106) E.L.T. 392 an identical issue was considered in the context of Notification 53/88 wherein it was held that the duty-paid character of the input is not lost, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that when credit is taken, the input becomes non-duty paid. Payment of duty is a question of fact and once duty is paid, the product remains duty-paid and that fact cannot be erased or obliterated on what happens subsequently. Therefore, as rightly observed by this Tribunal in the case of MRF Ltd. (supra) and Supreme Industries - 2002 (148) E.L.T. 484, affirmed by the Apex Court [2003 (153) E.L.T. A91 (S.C.)] by taking credit, the inputs do not become non-duty paid. The very fact that credit has been allowed itself is a proof that duty has been paid on the inputs and without payment of duty, no credit can be taken. Therefore, benefit of Notification 53/88 cannot be denied on waste and scrap of plastics manufactured from duty-paid inputs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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