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2019 (4) TMI 1588 - AT - Central Excise100% EOU - benefit of N/N. 23/2003- CE, dated 01.03.2003 - violation of import conditions - benefit denied on the ground that they were using imported resin and ager in the manufacture of final products cleared to DTA - HELD THAT - It is the case of the appellant that going by the judgment of Hon ble Apex Court, epoxy resin and ager cannot be considered as raw materials but only as consumables and therefore they are entitled to the benefit of the exemption notification. On an identical issue regarding the same product, the coordinate Bench of the Tribunal at Bangalore in the case of IMPERIAL GRANITES (P) LTD. VERSUS COMMISSIONER OF CUS. C. EX., TIRUPATHI 2007 (3) TMI 165 - CESTAT, BANGALORE held that appellant is entitled to the benefit of exemption notification because epoxy resin and ager are not raw materials but consumables because the granite slabs can not come into existence without use if there are no cracks and fissures. The appellant is entitled to the benefit of the exemption notification No. 23/2003-CE - appeal allowed - decided in favor of appellant.
Issues:
Interpretation of whether epoxy resin and ager should be considered as raw materials or consumables for the purpose of availing exemption notification under Central Excise Tariff Act, 1985. Analysis: 1. The appellant, a 100% EOU engaged in manufacturing and exporting polished granite slabs, filed appeals against Orders-in-Appeal challenging the denial of exemption under notification No. 23/2003-CE due to the use of imported epoxy resin and ager in the manufacturing process. 2. The dispute primarily revolves around whether epoxy resin and ager should be classified as raw materials or consumables. The appellant argued that these items are consumables, while the Revenue contended that they qualify as raw materials based on the test laid down by the Hon’ble Apex Court in the case of Ballarpur Industries Limited. 3. The first appellate authority relied on the Ballarpur Industries Limited judgment to conclude that epoxy resin and ager should be treated as raw materials due to their indispensability in the manufacturing process of granite slabs. Consequently, the authority held the appellant ineligible for the exemption notification, leading to the imposition of duty. 4. The appellant cited the Imperial Granites Pvt. Ltd. case, where the Tribunal held that resin and ager should be considered consumables rather than raw materials, as granite slabs could be manufactured without them in the absence of cracks or fissures. This decision was upheld in subsequent cases, including Gem Granites, supporting the appellant's claim for exemption. 5. During the proceedings, the Departmental Representative reiterated the position that epoxy resin and ager must be treated as raw materials based on the Ballarpur Industries Limited judgment, opposing the appellant's argument that they should be classified as consumables. 6. After considering both sides' arguments and precedents, the Tribunal found that the issue had been settled in previous cases. Citing decisions from the Tribunal at Bangalore and Chennai, the Tribunal held that epoxy resin and ager are consumables, not raw materials, allowing the appellant to avail the exemption under notification No. 23/2003-CE. 7. Consequently, the Tribunal set aside the impugned orders, ruling in favor of the appellant and allowing the appeals, as the appellant was deemed eligible for the exemption notification based on the classification of epoxy resin and ager as consumables rather than raw materials. 8. The operative portion of the order was pronounced in open court, setting aside the impugned orders and allowing the appeals in favor of the appellant.
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