2009 (3) TMI 440 - AT - Customs

Notification No. 8/97-C.E., dated 1-3-1997- The Notification No. 8/97-C.E., dated 1-3-1997, exempts finished products manufactured in a 100% EOU wholly from the raw materials produced or manufactured in India and allowed to be sold in India from so much of the duty of excise leviable thereon u/s 3 of the Central Excise Act, 1944 as is in excess of an amount equal to the duty of excise leviable u/s 3 of the Act on like goods produced or manufactured in India other than in a 100% EOU. The contention of the respondent was that manufacturer manufactured Hydrogen Peroxide, removed from the factory to DTA, from raw materials which are wholly produced in India. The said contention was not accepted by the original adjudicating authority. It was held that the respondent imported a number of other raw materials. It is the contention of the respondent that all these items are consumables and they are not raw materials. Adjudicating authority dismissed the contentions of the respondents against which they were in appeal to ld. Commissioner (Appeals). Ld. Commissioner (Appeals) vide impugned order allowed the appeal of the respondent herein and set aside the order-in-original. Held that- we find that the items which were imported by the respondent and consumed during the course of manufacturing of the finished products viz. Hydrogen Peroxide, these items seem to be consumables and not raw materials. Revenue s appeal is rejected.

Summary

In the appellate tribunal CESTAT, Bangalore case of 2009 (3) TMI 440, the eligibility of a respondent for an exemption under Notification No. 8/97-C.E. was disputed. The respondent claimed exemption for Hydrogen Peroxide manufactured and cleared to DTA. The notification exempts finished products manufactured in a 100% EOU wholly from raw materials produced in India. The respondent's contention that the raw materials were wholly produced in India was disputed by the adjudicating authority, claiming that some materials were imported and not raw materials. The Commissioner (Appeals) allowed the respondent's appeal, but the Tribunal reversed this decision. The Supreme Court remanded the case back to the Tribunal. The Tribunal ruled that the imported items were consumables, not raw materials, with no evidence presented by Revenue. The issue was settled by the case CCE v. Sri Vajra Granites Ltd. Revenue's appeal was rejected.