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2016 (3) TMI 564 - CESTAT AHMEDABAD

2016 (3) TMI 564 - CESTAT AHMEDABAD - 2016 (334) E.L.T. 671 (Tri. - Ahmd.) - Benefit of exemption under Notification No.12/2012-CE, dt.17.03.2012 as amended on POY and Notification No.89/95-CE, dt.18.05.1995 on Waste and Scrap of POY and PSF denied - Held that:- We find from the report that PFY covers UDF (Undrawn Yarn), POY (Partially Oriented Yarn), or FDY (Fully Drawn Yarn), depending upon the winder speed and heat setting methods. In our considered view, the PFY as mentioned in the exemption .....

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should be remanded to the Adjudicating authority. - The demand of duty alongwith interest on POY is set aside. The penalties are set aside. The Adjudicating authority is directed to examine the demand of duty on waste of POY and PSF in the light of the earlier Tribunal order. Needless to say that the Adjudicating authority shall give proper opportunity of hearing before passing the order. The appeal filed by the appellant is disposed of in the above terms. Early hearing application is dismi .....

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esentative for the Revenue for preparation on the appeal hearing. So, we take up the appeal hearing. 2. After hearing both the sides and on perusal of the records, we find that the Appellant were engaged in the manufacture of Polyester Staple Fibre (PSF) classifiable under Sub-heading No.55032000 and Polyester Oriented Yarn (POY) classifiable under Sub-heading No.54024600 and PSF waste and POY waste classifiable under Sub -heading No.55051090 of the Schedule to the Central Excise Tariff Act, 198 .....

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lant submits that the Tribunal in their own case for the earlier period vide Order No.A/10613-10622/2015, dt.20.05.2015 (M/s Khodiar Fibre Film and Others Vs Commissioner of Central Excise & Service Tax, Surat) allowed the appeal in respect of POY and the demand of duty on waste of PSF and POY was remanded. 4. For the purpose of proper appreciation of the case, we reproduce below the relevant portion of the earlier Final Order dt.20.05.2015 (supra) as under:- 4. Heard both sides and perused .....

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ndigarh (supra). It was his case that all the issues in the present proceedings have been covered by CESTAT Delhi. Paras 4 to 6 of the order No. 53987-53990/2014 dated 23.09.2014, passed by CESTAT Delhi in the above case, are relevant and are reproduced below:- 4. In view of the aforesaid amendment it is evident that the impugned demand pertaining to the period 29th June 2010 to 16th March 2012 does not survive as the rate of duty on polyester staple fibre obtained from plastic scrap/waste inclu .....

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ibres mean staple fibres and filaments of organic polymers produced by manufacturing processes, either: (a) By polymerization of organic monomers, such as polyamides, polyesters, polyurethanes or polyvinyl derivatives; or (b) By chemical transformation of natural organic polymers (for example, cellulose, casein, proteins or algae), such as viscose rayon, cellulose acetate, cupro or alginates. It remains undisputed that none of these processes, had been undertaken by the assessee in respect of th .....

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om 29.6.2010. Consequently, for the period up to 28th June 2010 the goods were not liable to Central Excise duty as has been held by the CESTAT in the case of G.P.L. Polyfils (supra). In this regard it is pertinent to note that the CBEC vide Circular dated 29.6.010 stated that the case of G.P.L. Polyfils Limited would be relevant for the particular facts as in the said case and hence cannot be a binding precedent in other matters. This observation of CBEC was struck down by the Delhi High Court .....

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ement and the adjudicating authoritys attempt at distinguishing the CESTAT order falls abysmally short of that requirement. 6. In this regard, it is not out of context to quote Para 4 of the DO letter F.No. 334/15/2014-TRU dated 10.7.2014: 4. Excise duty on Polyester Staple Fibre (PSF) and Polyester Filament Yarn (PFY) manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles (which is already exempt w.e.f. 8.5.2012) is being exempted ret .....

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tic scrap and plastic waste were exempted as per the amendment carried under Notification No. 12/2012-CE dated 17.3.2012, an entry No. 172A was inserted by Notification No. 24/2012-CE dated 08.05.2012. So far as the period prior to 29.6.2010 is concerned, the same is covered by the decision of CESTAT in the case of CCE, Kanpur Vs. G.P.L. Polyfils Limited (supra). The argument of learned AR that POY is not a category of Polyester Filament Yarn is not correct in view of the HSN explanatory notes g .....

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lants or the same were exempted under retrospective exemption or by introducing entry No. 172A in Notification No.12/2012-CE dated 17.03.2012. Due to the corrective action taken by Revenue, it is held that there was no intention to charge duty on impugned PSF and POY for the period involved in these appeals. 6. So far as the chargeability of duty on waste and scrap in the manufacture of PSF and POY is concerned, the appellant has relied upon exemption Notification No. 89/95-CE dated 18.5.1995. O .....

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thority, who will decide the same in the remand proceedings, after giving opportunity of personal hearing to the appellant. 7. So far as imposition of penalties upon other appellants is considered, in our considered view, no penalties are attracted because on merits the appeals filed by the appellants are allowed. 5. We find that the Sr.No.172A of the Table appended to Notification No.12/2012-CE (supra) allowed Nil rate of duty on Polyester staple fibre (PSF) or polyester filament yarn, manufac .....

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etail. In this context, the learned Advocate on behalf of the Appellant drew the attention of the Bench to the report of Department and Scientific Industrial Research (DSIR) as under:- 01. PRODUCT INTRODUCTION: 0.1.1 Polyester filament yarn (PFY) is a long chain of synthetic polymer composed of an ester of a substituted aromatic carboxylic acid such as terephthalic acid. Polyester filament yarns are manufactured in a wide range of deniers and properties to suit virtually all textile requirements .....

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