JALAL PLASTIC INDUSTRIES NAVAGAON RAJKOT Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners in both these petitions are manufacturers of plastic bangles It is not in dispute that plastic bangles are manufactured out of monomer which is technically called methyl methacrylate monomer. It is hereinafter referred to as the monomer. Monomer is of two kinds. It may be virgin monomer or it many be regenerated monomer. Regenerated monomer is produced out of plastic scraps. It is the case of the petitioners that regenerated monomer is either purchased from indigenous manufacturers or it is imported. In some cases the manufacturers of plastic bangles themselves manufacture it.

(2.) Until the present dispute arose the Central Excise authorities had been taking the view that bangles manufactured out of regenerated monomer were not liable to payment of excise duty under Tariff item 15 in the First Schedule to the Central Excises and Salt Act 1944 (hereinafter referred to as the Act) but that they fell under residuary item Tariff item 68. The petitioners were not paying excise duty on them under Tariff item 68 because they were small manufacturers and were therefore exempted from payment.

(3.) On April 11 1980 the Central Government issued a circular to all Central Excise Collectorates in which they stated that if the manufacturers of plastic bangles themselves manufacture regenerated monomer they should be exempted from payment of excise duty under tariff item 15A by virtue of the notification issued on May 29 1971 However if they purchase regenerated monomer from others and manufacture bangles out of them exemption would not be available to them.