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M/s Alliance Fibres Ltd Versus Commissioner of C. Ex. & Service Tax, Surat-II

2016 (3) TMI 564 - CESTAT AHMEDABAD

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 notification, would also cover the POY as per the report of DSIR. So, we agr .....

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longwith 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 dismissed on infructuous. - Appeal No. E/10281/2015-DB; E/Early Hearing/10865/2015 .....

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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, 1985. The Adjudicating authority confirmed the demand of duty alongwith interest .....

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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 the case records. The issue involved in these appeals is whether PSF and POY .....

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gs 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 including waste of PET bottles has been made Nil. The impugned goods were exempted .....

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cturing 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 their fibre so as to bring the same within the ambit of this Chapter 54 or even .....

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e 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 vide its decision dated 30.9.2011 in the CWO No. 5454/2010. There is no doubt .....

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rder 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 retrospectively w.e.f. 29.6.2010 to 7.5.2012. Clause 102 of the Finance (No. 2) .....

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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 given under Central Excise Heading 54.02 heading 54.02. As per these HSN expla .....

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ng 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. On a specific query from the Bench, learned Advocate appearing for the appella .....

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ortunity 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, manufactured from plastic and plastic waste, including waste polyethylene terephthal .....

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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. 0.1.2 Polyester filament yarns are manufactured either from molten polymer .....

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