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Issues:
1. Denial of benefit under Customs Notification No. 11/97-Cus. for the imported item 'Photoner'. 2. Interpretation of 'raw material' under the Customs Act, 1962. 3. Requirement of complete consumption of material to be considered as raw material. 4. Application of judicial precedents in determining the status of an item as raw material. Detailed Analysis: 1. The appeal challenged the denial of benefits under Customs Notification No. 11/97-Cus. for the imported item 'Photoner'. The appellant argued that 'Photoner' was a raw material essential for the fabrication process, enabling precise cutting of steel plates for production. The Commissioner contended that 'Photoner' was not fully consumed and therefore could not be considered a raw material or part. The Tribunal noted that the item was used in shipbuilding works falling under the tariff heading in the notification. The appellant's argument that 'Photoner' was indispensable for the cutting process and was fully utilized, with even the waste being reprocessed, was accepted. The Tribunal emphasized that as long as a raw material was essential for the manufacturing process, the benefit under the notification could not be denied. 2. The crux of the issue revolved around the interpretation of 'raw material' under the Customs Act, 1962. The appellant contended that 'Photoner' qualified as a raw material based on its crucial role in the manufacturing process. The appellant relied on judicial precedents, including the case of CCE v. Eastend Paper Industries Limited, where wrapping paper was considered a raw material even though not fully consumed. The Tribunal emphasized that the term 'raw material' needed to be understood in the trade context and cited previous judgments to support the broad interpretation of raw materials. 3. An essential aspect of the dispute was whether complete consumption of the material was necessary to classify it as a raw material. The Commissioner's argument that 'Photoner' should be fully consumed to be considered a raw material was rejected by the Tribunal. The Tribunal highlighted that the requirement for an item to be completely consumed to qualify as a raw material was not a correct finding. The Tribunal emphasized that as long as the raw material was crucial for the manufacturing process, the benefit could not be denied based on partial consumption. 4. The application of judicial precedents played a significant role in determining the status of 'Photoner' as a raw material. The Tribunal referenced cases such as CCE v. Hindustan Aluminium Corporation and CCE v. Bharat Aluminium Corporation to support the broad interpretation of raw materials. These precedents established that the essentiality of the material in the manufacturing process was paramount, regardless of complete consumption. By aligning with these precedents, the Tribunal set aside the Commissioner's decision and allowed the appeal, granting consequential relief to the appellant.
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