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2016 (3) TMI 263 - CESTAT NEW DELHI

2016 (3) TMI 263 - CESTAT NEW DELHI - 2016 (337) E.L.T. 393 (Tri. - Del.) - Eligibility for exemption under Notification No. 50/2003-CE denied - area based exemption to the appellant/assessee was denied on the ground that the product they made in their unit is falling under Tariff Heading 4809.10 Carbon Paper of width exceeding 36 cms - Held that:- It is the appellantís plea that they have added cutting machine during the course of expansion. This was admitted in the impugned order. The appellan .....

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quently after printing and coating the same can be converted/sized to Carbon Paper of less width and length by dividing and cutting machine as per the requirement of the market. Having recorded so, the learned Commissioner (Appeals) proceed to conclude that cutting Carbon Paper of broader width to smaller size will amount to manufacture and hence duty has to be discharged on the larger Carbon Paper which is manufactured by the assessee, later further manufactured into smaller Carbon Paper by the .....

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ot exceeding 36 cms. fell in a different entry. - The impugned order itself mentions that after printing and coating the Carbon Paper of larger size is converted or sized into Carbon Paper of smaller size. There is no allegation or factual evidence in the proceedings before the lower Authorities for finding to the non-application of the Honíble Supreme Courtís decision in the case of CCE, New Delhi - I vs. S.R. Tissues Pvt. Ltd. (supra). We find the decision of the Honíble Supreme Court is a .....

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: Ms. Surabhi Sinha, Advocate For the Respondent : Shri R.K. Mishra, Authorized Representative (DR) ORDER PER. B. RAVICHANDRAN :- These 8 appeals are dealing with the same issue, made up of two sets of 4 appeals each, against Commissioner (Appeals) orders dated 26/12/2006 and 14/06/2007. All these appeals are taken up together for disposal. The main appellant M/s Whale Stationery Products Ltd. are engaged in the manufacture of Stencil Paper and Carbon Paper falling under Tariff Heading 4816 and .....

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vail exemption under the above said Notification. The said Notification excluded products under Tariff Heading 4809.10. The Revenue entertained doubts regarding the appellant/assessees eligibility for the said exemption on the ground that they have not undertaken substantial expansion and further they have been manufacturing carbon paper having width more than 36 cms., which is not covered by the said notification. Proceedings were initiated against the appellant/assessee and the Original Autho .....

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, the appellant/ assessee and the Directors have filed these appeals. 3. The learned Counsel for the appellants submitted that in the impugned orders the exemption to the appellant/assessee was denied on the ground that the product they made in their unit is falling under Tariff Heading 4809.10 Carbon Paper of width exceeding 36 cms. This product, being a finished and marketable product, is not entitled for exemption under Notification No. 50/2003-CE in view of Sl. No. 19 of Annexure I of the sa .....

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lant/ assessee is liable to pay duty and are entitled for Cenvat credit on such payment. The learned Counsel pleaded that the original proceedings against the appellant/assessee were to deny exemption under Notification No. 50/2003-CE mainly on the ground that there is no substantial expansion by the appellant/ assessee. The Commissioner (Appeals) in his order dated 26/12/2006 categorically held that the appellants have increased their installed capacity and hence are eligible for exemption unde .....

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otification. Further, in January 2004 they have intimated the expansion having been completed and the intention to avail the exemption. In March 2004 they have also informed that w.e.f. 27/1/2004 they had stopped the production of Carbon Paper falling under Heading 4809.10 of width exceeding 36 cms. before started availing the exemption under the above said notification. The learned Counsel submitted that the appellant/assessee had increased their production capacity as per the requirement in th .....

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cms. falling under Tariff Heading 4809.10. The said product being cut and slit to make carbon paper of lesser dimension will amount to manufacture. He supported the findings in the impugned orders. 5. We have heard both the sides and examined appeal records. Though the original proceedings against the appellant/ assessee was mainly on the ground that they have not undertaken substantial expansion of their production capacity, the impugned order came to the conclusion that there has been substan .....

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they have been manufacturing after the expansion also. Whereas the appellants contention is that they have stopped clearing the Carbon Papers of wider width after the expansion and they wanted to avail the exemption under the aforesaid Notification. The Carbon Papers are cut to smaller sizes of less than 36 cms. width and are covered under Tariff Heading 4816. This claim of the appellant was rejected in the impugned order on the ground that Carbon Paper of width exceeding 36 cms. comes into exi .....

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forward any evidence to the effect that even after expansion the appellant/assessee is clearing only Carbon Papers of width exceeding 36 cms. The learned Commissioner (Appeals) in his impugned order dated 26/12/2006 recorded that at first Carbon Paper with normal width exceeding 36 cms. is manufactured by the unit and subsequently after printing and coating the same can be converted/sized to Carbon Paper of less width and length by dividing and cutting machine as per the requirement of the marke .....

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S.R. Tissues Pvt. Ltd. reported in 2005 (186) E.L.T. 385 (S.C.). We find that the Hon ble Supreme Court in the said case held that slitting and cutting of jumbo rolls of tissue papers or aluminium foils into various shapes and sizes will not amount to manufacture merely because the jumbo roll exceeding 36 cms. fell under one entry and the toilet paper of width not exceeding 36 cms. fell in a different entry. The Hon ble Supreme Court observed as below :- The predominant test in such a case is w .....

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