2006 (7) TMI 374 - AT - Central Excise

Summary

Issues:
- Benefit of Notification No. 23/2003-CE dated 31-3-2003 denied to 100% EOU for using imported Vanadium Pentoxide in manufacturing finished goods.
- Contention regarding Vanadium Pentoxide as a catalyst and not a raw material.
- Reliance on earlier Tribunal decision for granting benefit.
- Reference to Larger Bench decision in Jayant Agro case regarding similar notification.
- Decision on whether imported catalyst usage violates the notification condition.
- Requirement of deposit by the appellant to secure Revenue's interest.

Analysis:

The judgment revolves around the denial of the benefit of Notification No. 23/2003-CE to a 100% EOU for utilizing imported Vanadium Pentoxide in manufacturing finished goods. The appellant argued that Vanadium Pentoxide is a catalyst, not a raw material, and thus, should not disqualify them from the notification's benefits. The Tribunal considered the appellant's reliance on a previous decision in their favor but also referenced a Larger Bench decision in the Jayant Agro case, which concluded that the use of imported materials, including catalysts, could disqualify the benefit of the notification.

The Tribunal compared the wording of the notifications in both cases and determined that the imported catalyst's usage in the manufacturing process could impact the eligibility for concessional duty rates. Despite the appellant's favorable earlier decision, the Tribunal upheld the Larger Bench decision, emphasizing that the latest decision by the constituted Larger Bench would prevail. Consequently, the Tribunal ordered the appellant to deposit Rs. 5 crores within eight weeks to secure the Revenue's interests, considering the high stakes involved and the point of time bar raised by the appellant.

In conclusion, the judgment highlights the significance of the latest decision by the Larger Bench in determining the eligibility for benefits under notifications, even if earlier decisions favored the appellant. The requirement of a deposit by the appellant to secure the Revenue's interests showcases the Tribunal's approach to balancing the appellant's concerns with the Revenue's stake in the matter.