1994 (4) TMI 184 - AT - Central Excise

Summary

Issues:
Eligibility of certain inputs for set off of duty under Notification No. 201/79 after amendment by Notification No. 105/82.

Analysis:
The Tribunal considered six appeals filed by the Department regarding the eligibility of certain inputs for set off of duty under Notification No. 201/79 after its amendment by Notification No. 105/82. The respondents were engaged in manufacturing Liquid Glucose and used various items like activated carbon, 'Indian Hip Resins,' and 'Dicamol and resins' in the manufacturing process. The Department contended that post-amendment, input duty relief was restricted to raw materials or component parts, not applicable to the items used by the respondents. The Assistant Collector confirmed the demand, but the Collector (Appeals) ruled in favor of the parties, citing a Tribunal order in a different case. The issue revolved around the interpretation of the term 'raw material' under the notifications.

The Department argued that the items used by the respondents were not raw materials for the manufacture of Liquid Glucose and, therefore, not eligible for duty relief. They emphasized that the notifications aimed to provide relief only for raw materials or component parts. The Department's stance was supported by previous Tribunal decisions in similar cases. They also raised concerns about the limitation period for the demand.

On the other hand, the respondents' representatives contended that the items used were essential for improving the quality of the end-product and, therefore, qualified for duty relief under the notifications. They referenced various Tribunal and Supreme Court decisions to support their argument, highlighting the physical changes and gradual consumption of the items during the manufacturing process.

After considering the arguments, the Tribunal upheld the impugned orders in favor of the respondents. They relied on previous Tribunal and Supreme Court decisions, emphasizing that the presence of the material in the final product was not necessary for eligibility for duty relief. The Tribunal concluded that the items used by the respondents, although not present in the final product, were crucial for the manufacturing process and, therefore, qualified as raw materials for the end-product. The Tribunal dismissed the appeals filed by the Department, following the precedent set by the Supreme Court decisions.