K. Prakash Anand, Member (T)

1. In this case appellants claim benefit of Notification No. 16/82-C.E., dated 14th February, 1982 which provides partial exemption from duty in respect of polyester fibre manufactured from wastes by the process of recycling wastes. The department rejects the claim on the ground that the fibre cannot be said to be manufactured exclusively out of wastes. When the party went up in appeal before Collector of Central Excise (Appeals), Madras, the view of Assistant Collector was upheld.

2. We have heard Dr. Gauri Shankar, Senior Advocate and Shri Arora and Shri Rajappa, Advocates on behalf of the Appellant and Shri K.C. Sachar, JDR on behalf of the department.

3. Dr. Gauri Shankar has stated that the point at issue in this matter is fully covered in favour of the appellant by the decision of the Supreme Court in the case of Aluminium Corporation of India Limited v. Union of India and Ors. 1978 E.L.T. (J 452) and Union of India and Ors. v. Tata Iron Steel Co. Ltd.,, Jamshedpur, 1977 E.L.T. (J 61). It is also submitted that the decision of the Madras High Court in the case of Indian Organic Chemicals Ltd. v. Union of India and Ors., 1983 E.L.T. 34 is also in accordance with the views of the Supreme Court in the two cases.

4. Shri K.C. Sachar, JDR for the respondent briefly submits that he would like to reiterate the stand taken by the department before the lower authorities. He submits that the raw material in this case comprises a nominal amount of 4% waste and 96% of it is made up of virgin chips. It is submitted that fibre made out of such a blend cannot be considered a manufacture out of waste. The learned Departmental Representative adds that the decision of the Madras High Court in the case of Indian Organic Chemicals Ltd. (supra) cannot support the appellant's claim in the present matter. In that case, the party had sought the benefit of Notification No. 37/78 which granted, exemption to fibre/tops manufactured out of duty-paid waste. The petitioners had claimed that they used in the process of manufacture MEG (Glycol) as an assisting agent, but it was admitted that the " meg" used was fully recovered back in the process, subject to a minimal loss due to handling. The view taken by the Court was that all that was required was that the source of the end product must be duty-paid. It was held that since MEG, (Glycol) had been used only as an assisting agent, this could not deprive the Petitioners of the benefit of the relevant notification. In the present matter, Shri Sachar says, the issue is not the use of-a foreign ingredient as an assisting agent. The plain fact of the matter is that fibre is being manufactured only from the nominal quantity of 4% waste chips and 96% virgin chips. Shri Sachar also adds that the decision of the Supreme Court in the case of Aluminium Corporation of India Limited (supra) can also not apply to the present matter as the issue in that Case was whether the concession which was intended in respect of duty paid material used in the manufacture of final product should be denied merely because some non-duty paid material had been used. It is, in this background, that the Supreme Court decided that a pro tanto remission should be granted in respect of duty-paid material used in the final product. The whole object in that case was to see that duty was not charged twice in respect of the same material. It is also submitted that the ratio in the case of Union of India and Ors. v. Tata Iron Steel Co. Ltd., Jamshedpur is also essentially the same, that is, to grant exemption in case the final product is manufactured out of duty-paid material and in administering this notification, we have to go by the simple wording thereof and decide whether the final product is or is not manufactured out of duty paid material.

5. We have carefully considered the facts of the case the submissions made before us and the case law cited. In the case of Aluminium Corporation of India Limited v.