V inay Kumar Shr af f FCA, AICWA, ACS, DISA(ICAI), Adv. Dip. in Mgt. Acctg. (CIMA- London) 52 Weston Street 5th Floor KOLKATA – 700 012 PHONE: 22259194 (O), 98300 61359 (M) e-mail:
[email protected]
Assisstant Commissioner of Central Excise Howrah West Division – I , 25, Princep Street, Kolkata – 72
October 28, 2005
Dear Sir, Sub: Submissions with respect to Show cause –cum-Demand Notice No. CE 20/ CPPL/RVIII/ HWD/91/41 dated 23.8.91 Further to the reply submitted by my client Creative Polypack Ltd. in response to the show cause notice, I submit as follows: (1) For that the learned Superintendent, Range VIII, HWD has erred in law in denying modvat credit to the tune of Rs. 1,15,074/- invoking the provisions of rule 57C of Central Excise Rules, 1944 as the assessee treated sub-standard goods as waste product chargeable to nil rate of duty. However as per Rule 57D of Central Excise Rules, 1944 modvat credit cannot be denied on the ground that part of input is contained in any waste, refuse, or by product during the process of manufacture of final product, whether or not such waste is exempt from whole of excise duty thereon or is chargeable to nil rate of duty. (2) For that the learned Superintendent, Range VIII, HWD has erred in facts of the case by stating that sub-standard coated & printed paper are marketable excise product and the same cannot be destroyed as unfit for consumption/marketing as waste. The fact of the case is that Creative Polypack Ltd manufactures packing product in accordance with the specific design and specification provided by the customer and even if there is any minor deviation in the standard of specification provided by the customer than it becomes unfit for consumption by the customer. Further it cannot be sold to any other customer. For example if packing of ‘Rin’ detergent is to be manufactured according to design and specifications provided by the customer Hindustan Lever Limited than it can only be sold to Hindustan Lever Limited and in case of any deviation in design or specification provided by Hindustan Lever Limited, it cannot be sold to them. It was decided in the case of Yenepoya Minerals & granites Ltd. – 2002(142)E.L.T. 427 (Tri-Bang.) that ‘Waste/Rejects’ have to be understood by the concept of the person in trade., in the absence of any parameters fixed by a definition in tariff. Hence the substandard coated & printed paper are merely a waste and are not marketable or fit for consumption. Further if the sub-standard coated & printed paper would have been marketable my client could have gained nothing by destroying it instead of selling it of in the market and generate revenue out it.
V inay Kumar Shr af f FCA, AICWA, ACS, DISA(ICAI), Adv. Dip. in Mgt. Acctg. (CIMA- London) 52 Weston Street 5th Floor KOLKATA – 700 012 PHONE: 22259194 (O), 98300 61359 (M) e-mail:
[email protected]
Hence on the above ground and other grounds taken in the written reply to show cause notice the demand for reversal of duty under Rule 57I read with section 11A of Central Excise Act, and penalty under Rule 17 for violation of Rule 57C and Rule 149 should be dropped. Thanking you, Yours truly, Vinay Kumar Shraff Authorised Representative.