SWADESHI POLYTEX LTD. versus COLLECTOR OF CENTRAL EXCISE

SWADESHI POLYTEX LTD. versus COLLECTOR OF CENTRAL EXCISE

Where ethylene glycol is used as input in the manufacture of excisable goods (polyester fibre), set off (credit) of duty paid on the input is not to be denied merely because part of the input is found in non-excisable by-products (methanol), wastes, or refuse arising during manufacturing, even prior to the 11th April, 1981 amendment to notification No. 201/79, since the manufacture of the main excisable product (polyester fibre) is determinative and Government intent and trade notices support this interpretation.

Parties
Appellant: Swadeshi Polytex Ltd.; Respondent: Collector of Central Excise
Jurisdiction
India
Judgment Date
23 November 1989
Procedural Posture
Civil Appeal / Appeal Under Section 35 L of the Central Excises & Salt Act, 1944 Against Order of the Customs, Excise & Gold (control) Appellate Tribunal
Outcome
Appeal allowed
Legal Topics
Exemption Notifications, Set Off/proforma Credit of Excise Duty, Interpretation of Exemption Provisions
Central Excise Law Taxation Exemption Notifications Set Off/proforma Credit of Excise Duty Interpretation of Exemption Provisions

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Parties

Swadeshi Polytex Ltd.

Appellant

Collector of Central Excise

Respondent

Procedural Posture

Civil Appeal / Appeal Under Section 35 L of the Central Excises & Salt Act, 1944 Against Order of the Customs, Excise & Gold (control) Appellate Tribunal

Legal Issues

  1. 1 Whether the appellant is entitled to claim set off (credit) of excise duty paid on ethylene glycol contained in methanol (by-product), ethylene glycol residual waste, and polyester fibre waste in the manufacture of polyester fibre under exemption notification No. 201/79 prior to 11th April, 1981.

Ratio Decidendi

Where ethylene glycol is used as input in the manufacture of excisable goods (polyester fibre), set off (credit) of duty paid on the input is not to be denied merely because part of the input is found in non-excisable by-products (methanol), wastes, or refuse arising during manufacturing, even prior to the 11th April, 1981 amendment to notification No. 201/79, since the manufacture of the main excisable product (polyester fibre) is determinative and Government intent and trade notices support this interpretation.

Court Disposition

Appeal allowed

Orders

  • Order and judgment of the Tribunal set aside.
  • Combined orders of the Collector (Appeals) Nos. 284-286/CE/MT/83 dated 15th December, 1983 restored.