1998 (7) TMI 196 - AT - Central Excise

Summary

Issues Involved:
- Interpretation of Notification 43/88 regarding exemption for pesticide intermediates under Chapter 28 or 29 used in the manufacture of goods under sub-heading 3808.10 of the Tariff.

Comprehensive Analysis:

Issue 1: Benefit of Notification 43/88 for pesticide intermediate
The appeal raised the question of whether the benefit of Notification 43/88 applied to a product classified as a pesticide intermediate. The Appellant argued that as the final product, trimethyl phosphite, did not fall under sub-heading 3808.10, the conditions of the Notification were not met. On the other hand, the Respondent contended that the trimethyl phosphite was used in the manufacture of insecticides/pesticides under sub-heading 3808.10, thus fulfilling the Notification's requirements. The Respondent cited previous Tribunal decisions supporting their stance, emphasizing the technological necessity of using intermediates in the manufacturing process.

Issue 2: Application of Notification conditions
The Tribunal analyzed Notification 43/88, which granted exemption to products listed in the annexure if used in the manufacture of goods falling under sub-heading 3808.10. It was noted that the trimethyl phosphite, manufactured from phosphorous trichloride, was cleared under Chapter X procedure and used in producing insecticides/pesticides. Referring to previous Tribunal decisions, the Tribunal agreed that denying the exemption to phosphorus trichloride used in trimethyl phosphite production would defeat the purpose of the Notification. The Tribunal affirmed that all raw materials specified in the Notification, whether used directly or through intermediates in insecticide/pesticide production, were eligible for exemption.

Conclusion:
After considering the arguments from both sides and reviewing relevant precedents, the Tribunal upheld the Commissioner (Appeals)'s decision to grant the benefit of exemption to the Respondent. The Tribunal emphasized that the Notification aimed to exempt all specified raw materials used in insecticide/pesticide manufacturing, including intermediates like phosphorus trichloride leading to trimethyl phosphite. Therefore, the appeal by the Revenue was rejected, affirming the eligibility of the Respondent for the exemption under Notification 43/88.