1988 (7) TMI 139 - AT - Central Excise

Summary

Issues:
1. Eligibility of Barium Carbonate for benefit of Notification 201/79 as amended by 105/82-C.E.
2. Interpretation of "raw-material" under the notification.

Detailed Analysis:

Issue 1: The appeal concerns whether Barium Carbonate used in manufacturing caustic soda is eligible for the benefit of Notification 201/79 as amended by 105/82-C.E. The Collector (Appeals) held that the use of Barium Carbonate for purifying brine solution, which is then electrolyzed to produce caustic soda, does not qualify as a raw material for caustic soda production.

Issue 2: The Tribunal considered the definition of "raw-material" in the context of the notification. The appellant argued that Barium Carbonate's purification of brine is essential for caustic soda production, citing a publication on industry standards. Referring to precedents, the Tribunal emphasized that inputs qualifying as raw materials directly aid in the manufacturing process of the excisable goods claimed under the notification.

The Tribunal analyzed previous cases involving inputs like alum in paper manufacturing and materials in aluminum production to establish the concept of raw materials. It was emphasized that substances integral to the manufacturing process, even if they lose their identity during production, should be considered raw materials. In this case, the Tribunal found that Barium Carbonate, by purifying brine as an essential step in caustic soda production, qualifies as a raw material.

The Tribunal concluded that Barium Carbonate is indeed a raw material for caustic soda manufacture, as it loses its identity in the purification process. Relying on the understanding of raw materials in manufacturing streams, the Tribunal allowed the appeal, granting the appellants consequential relief based on the interpretation of the notification.

In summary, the judgment revolved around the interpretation of "raw-material" under a specific excise duty notification, emphasizing the essential role of inputs in the manufacturing process. The Tribunal's decision clarified that Barium Carbonate's use in purifying brine for caustic soda production qualifies it as a raw material, warranting the appellants' appeal to be allowed.