COLLECTOR OF CENTRAL EXCISE Vs. CHITRA POLY PACK INDUSTRIES

JUDGEMENT

(1.) THE above appeals arising out of the common impugned order of the Collector of Central Excise (Appeals), Madras, dated 27-1-1988 have been filed by the Collector of Central Excise, Hyderabad.

(2.) The short question that is canvassed before us by Shri Vadivelu, the learned D.R., is that the Respondents herein are manufacturing HDPE sack and during the course of manufacture of HDPE sack, initially tapes .were used as inputs and before manufacture, an excisable commodity viz. HDPE fibric classifiable under Tariff Item 22F of Central Excise Tariff, as it then stood, came into existence. The Respondents filed refund claims in terms of Section 11B of the Central Excises and Salt Act, 1944 for Rs. 1,13,671.85 (M/s. Chitra Polypack Industries) and for Rs. 1,51,741.28 (M/s. H.M. Plastics Pvt. Ld.) on the ground that the duty suffered by the raw material HDPE tapes, which went into the manufacture of HDPE sacks, would be entitled for set off by virtue of applicability of Rules 9 & 49 of the Central Excise Rules, 1944. The claims were rejected by the Assistant Collector of Central Excise, Hyderabad, by his order dated 9-7-1987 and 8-9-1987, which on appeal was set aside under the impugned order by the Collector of Central Excise (Appeals), Madras, dated 27-1-1988 out of which the present appeals arise.

(3.) SHRI Venkateswara Rao, the learned Consultant for the respondents, on the other hand submitted that the issue is covered squarely by the ratio of the ruling in the case of Collector of Central Excise, Bombay v. Garware Paints 1987 (31) E.L.T. 775 (Tri.) , of the Special Bench decision which has placed reliance on the ruling of the Bombay High Court in the case of Indian Aluminium Co. Ltd. and Anr. v. A.K. Bandyopadhyay and Ors., reported in 1980 (8) E.L.T. (Bom.) 146. SHRI Rao submitted that even if the product is totally exempted from payment of duty, even then the Respondents would be entitled to pro-forma credit under Rule 56A if the input and the finished product fall under the same tariff heading.