K.D.Mankar, Member (T) - (1.)THE instant stay application has been filed by the appellants seeking waiver of pre-deposit of duty of Rs. 81,68,047/- and equivalent amount of penalty imposed on them vide the impugned order-in-original passed by the Commissioner of Central Excise.
(2.)The appellants manufacture PVC plain film and PVC film coated with polyvinyledine chloride (PVdC). The PVC, manufactured by the appellants is partially cleared for the market after payment of duty and partially within the factory for the manufacture of PVdC Film. The PVC film emerges in the roll form after the calendaring process which is subjected to quality testing by the Quality Assurance Department. On approval by the Quality Assurance Department, such rolls are taken to finishing section for final slitting and testing which includes blister packing trials and thermo-formability test. On final approval of such slitted reel, entries are made in RG-1 register and final packing is carried out.
In case of captive consumption of PVC film within the factory, rolls coming out of calendaring stage are taken to PVdC Coating Section, where PVdC is coated on PVC film. Again after coating, PVdC film emerges in roll form which is approved by Quality Assurance Department. Similarly, such PVdC film rolls are taken to finishing section for slitting and final testing as mentioned above, prior to recording in RG-1 register.

(3.)DURING the process of manufacture, failure to meet the Quality Standard either at roll stage or slitting stage, results in the material being scrapped because of its inability to meet the standards of finished goods. The material so scrapped is either re-used after being crushed within the manufacturing process or such material is transferred to scrap yard, from where it is cleared after payment of duty. The PVC material can be reused after being crushed within the manufacturing process, whereas PVdC material cannot be re-used after crushing.