2004 (12) TMI 197 - AT - Central Excise

Summary

Issues:
Whether the benefit of Notification No. 63/95-C.E. dated 16-3-1995 is available to the appellant in respect of explosives manufactured by them.

Analysis:
In this case, M/s. Gulf Oil Corporation Ltd. appealed to determine if they are eligible for the benefit of Notification No. 63/95-C.E. dated 16-3-1995 regarding explosives manufactured by them. The appellant contended that they mix different ingredients at the mine site to manufacture explosives, similar to a previous case where such benefit was granted. They argued that the process of mixing the ingredients at the mine site qualifies them for the notification's exemption. The appellant also highlighted that the constituents individually are not explosive or classifiable under the relevant tariff heading. On the other hand, the Revenue argued that a new product, explosive, emerges during the mixing process, making it liable for excise duty under the Central Excise Tariff. They emphasized Note 2 to Section VI, stating that goods intended to be mixed for a new product are classified under the appropriate heading. However, the Tribunal found merit in the appellant's submission that the explosive only comes into existence after mixing the ingredients at the mine site, not at the factory. The Tribunal clarified that Note 2 to Section VI does not apply in this case as the manufacturing process occurs at the mine, not the factory. They referenced a Supreme Court case to support that a process mentioned in the tariff entry does not automatically signify manufacturing. Since the actual manufacturing of explosives happens at the mine site, the Tribunal ruled in favor of the appellant, granting them the benefit of Notification No. 63/95-C.E. and allowing the appeal.

This detailed analysis of the judgment highlights the arguments presented by both parties, the legal interpretations of relevant provisions, and the Tribunal's reasoning leading to the decision in favor of the appellant regarding the eligibility for the notification's benefit.