Mathew John - (1.) THE appellants are manufacturers of plastic film, plastic laminated film and plastic pouches falling under Sub -Heading Nos. 3920.32, 3920.38 and 3923.90 respectively of the Schedule to the Central Excise Tariff Act, 1985. They also make plastic pouches out of plastic film and plastic laminated film and clear plastic pouches. In this process they were captively consuming plastic film and plastic laminated film to make plastic pouches. There were also clearing plastic film and plastic laminated film to other buyers availing Notification /99 -CE for goods manufactured by Small Scale units. The dispute involved in the present appeals relate to the issue that the value of plastic film and plastic laminated film captively consumed had not been taken into account while calculating the aggregate value of clearances that could be cleared without payment of duty in a financial year under the above notification. The details of Show Cause Notices issued are as under: - border=1 cellspacing=0 cellpadding=0> Appeal No. Period Duty Demand (Rs.) E/886/03 April -Sept - 1999 9,59,838 E/885/03 Oct -Dec - 1999 4,50,031 E/874/03 Jan -March 2000 4,41,778
(2.) FROM 2.6.98, a separate notification No. -CE dt. 2.6.98 was issued exempting plastic pouches and similar goods falling under headings 39.23, 39.24 and 39.26 up to the value of Rs. 85 lakhs that may be cleared during the remaining part of that financial year. This exemption was Notification No. 5/99 (S. No. 70) dt. 28.2.99 was continued in Notification No. /2000 (S. No. 65) dt. 1.3.2000 with some modification in value limit. The appellants were availing these exemptions and not paying duty on plastic pouches. Since the final product was exempted from duty, Revenue was of the view that on plastic film and plastic laminated film used within the factory for manufacture of exempted product viz. Plastic pouches the appellants should have discharged duty there on or should have included the value of such goods in the aggregate value of clearances under notification 8/98 -CE. Based on such reasoning, three Show Cause Notices have been issued for different periods as aforesaid. The appellants did not file any effective reply or cause personal appearance on the dates fixed for personal hearing. The matter was decided ex -parte in adjudication confirming the demand with penalty under Rule 173Q of Central Excise Rules. In appeal proceedings also, adequate opportunities were given for personal hearing which the appellant did not avail. Thereafter, the Commissioner (Appeals) passed the impugned order disposing of the three appeals. Now before the Tribunal, they are represented through their advocate. The learned advocate for appellant invites our attention to para 3(c) of Notification No. /99 -CE dt. 28 -2 -1999 which reads as under: - 3. For the purpose of determining the aggregate value of clearances for home consumption, the following clearances shall not be taken into account, namely: - (a)... (b)... (c) Clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods.
(3.) HIS contention is that since plastic film and plastic laminated film are used within the factory for further manufacture of plastic pouches, value of such captive clearances cannot be added for arriving at the value of aggregate clearances for which exemption is available.;