2017 (8) TMI 779 - AT - Central Excise

Whether the imported resins used in the manufacture of polished granite is a raw material or consumable - 100% EOU - Notification No.8/97-CE dated 1.3.1997 - Interest - Penalty - Held that - In the case of Gem Granites Vs. Commissioner of customs, Seaport (Import), Chennai - 2007 (5) TMI 101 - CESTAT, CHENNAI wherein it was held that the Bench considered Notification No.23/03-C.E. as well. It also took into account the Development Commissioner1s clarification which was to the effect that the resins used by EOUs in the polishing of granite blocks were only consumables. We are in full agreement with the view taken by the co-ordinate Bench. Accordingly, it is held that the appellants did not use any imported raw material in the manufacture of polished granite slabs during the material period and hence were eligible for the benefit of concessional rate of duty under Notification No.23/03-C.E. ibid - Appeal allowed.

Summary

Issues: Whether imported resins used in the manufacture of polished granite are considered as raw material or consumable for the purpose of duty exemption under Notification No.8/97-CE.

Analysis:
The appellant, a 100% EOU engaged in manufacturing polished granite slabs, imported resins for use in the finished products, which were then cleared to DTA. The department contended that the benefit of duty exemption under Notification 8/97-CE is not available for goods cleared to DTA. The proceedings resulted in the confirmation of duty demand, interest, and penalties, leading to the appeal.

The appellant argued that the imported resins were consumables, not raw materials, citing judgments in similar cases. The Tribunal referred to a previous judgment where it was held that resins used by EOUs in manufacturing granite slabs were consumables, not raw materials, making them eligible for duty concessions under the relevant notification. Following this precedent, the Tribunal concluded that the imported resins were consumables and allowed the appeal, setting aside the impugned order.

In summary, the Tribunal determined that the imported resins used in manufacturing polished granite slabs were to be considered as consumables, not raw materials, based on established precedents. Consequently, the appellant was deemed eligible for the concessional rate of duty under the relevant notification, leading to the appeal being allowed and the impugned order set aside.