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TMI Blog2016 (9) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... see M/s. Alliance Minerals Pvt. Ltd, Tada, Nellore District are 100% EOU, and are engaged in the manufacture of Polished Granite Slabs falling under Chapter Sub Heading No.68022390 of Central Excise Tariff Act, 1985. The assessee obtained Customs Private Bonded Warehouse License and commenced production from February 2008. The Assessee are cleaning their goods in DTA as permitted by the Development Commissioner and paying excise duty equivalent to excise duty leviable for the like products manufactured in a normal unit as prescribed under Notification No.23/2003-CE dated 31.03.2003. Department held that one of conditions to be fulfilled for availing the above said Notification is that, the goods should have produced or manufactured in 100% EOU wholly form the raw materials produced or manufactured in India. The Department noticed that the assessee have imported Epoxy Resin and used the same in the manufacture of polished granite slabs; that he resin has double effect of assuring the strength of the slabs and providing a clean feeling of touch; that during the period (i) from July, 2010 to December,2010, the assessee imported 4110 Kgs of Epoxy Resin valued at ₹ 22,73,070/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured in 100% EOU wholly from raw materials produced or manufactured in India (imported). 6. Hon ble Supreme Court in the case of Collector Vs. Ballarpur Industries Ltd. [1989(43) ELT 804 (SC)], has gone into the issue of what can be considered as raw material. The relevant portions of the judgment is reproduced below:- 5. The question, in the ultimate analysis, the whether in input of Sodium Sulphate in the manufacture of paper would cease to be a Raw-Material by reason alone of the fact that in the course of the chemical reactions this ingredient is consumed and burnt-up. The expression Raw-Material is not a defined term. The meaning to be given to it is the ordinary and well-accepted connotation in the common parlance of those who deal with the matter. The ingredients used in the chemical technology of manufacture of any end-product might comprise, amongst others, of those which may retain their dominant individual identity and character throughout the process and also in the end-product; those which, as a result on interaction with other chemicals or ingredients, might themselves undergo chemical or qualitative changes and in such altered form find themselves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind sustenance from the ratio of the following case laws:- a. Gem Granites Vs. CC. Seaport(Import), Chennai [2007 (216)ELT 153 (Tri. Chennai)] Relevant portion is reproduced below:- 2. The appellants are a 100% Export Oriented Unit engaged in the manufacture of Polished Granite Slabs . During Nov 04 to Oct 05, they had cleared their product to the Domestic Tariff Area (DTA) at concessional rate of duty in terms of Notification No. 23/2003-C.E. dated 31-3-2003 (Sl. No. 3 read with condition No. 3). The Notification had provided concessional rate of duty for the aforesaid goods subject to the condition that the goods should have been produced or manufactured wholly from the raw materials produced or manufactured in India. Admittedly, the appellants product was manufactured out of indigenously procured granite blocks. However, in the process of cutting and polishing of the said raw material, the appellants had used certain imported epoxy resins. These resins filled any hairline cracks, fissures or holes which might arise on the surface of the slabs on cutting and polishing. The department took the view that an imported raw material had been used in the manufacture of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t s contention had been that they are not raw materials and they are not required to be used for bringing the polished granites into existence, therefore, they are consumables. The polished granites are removed even without use of these two materials in large number of cases. This is used only when there are certain cracks in the granites and they are removed after its use. It does not remain along with the final product. They drew strength from the Apex Court judgment rendered in the case of CCE v. Ballarpur Industries Ltd. - 1989 (43) E.L.T. 804 (S.C.) which analyzed the definition of raw materials in Para 5 of this judgment. The judgment concludes The ingredients goes into the making of end-product in the sense that without its absence the presence of the end-product, as such, as rendered impossible. This quantity should coalesce with the requirement that its utilization is in the manufacturing process as distinct from the manufacture apparatus . It is submitted that such a possibility does not arise and polished granites are being removed in majority of cases where there are no cracks and fissures without use of these two materials. They are consumables and as such, the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arifying that both these items are consumables. He has clearly noted after stating the manufacturing or technical process that both the items does not remain along with the polished granites. They are also used in the minimum cases where there are fissures and holes. This aspect of the matter has not been denied by the revenue. The appellants have been clearing the mo polished granites in majority of the cases where there are no fissures or minute pores or cracks. Before polishing the granites, these two items are applied and after polishing processes they get eliminated. Therefore, the finding rendered by the Tribunal in the case of Forbes Gokak Ltd. (supra) and Maruti Cottex Ltd. (supra) in the light of the Apex Court judgment in the case of CCE v. Ballarpur Inds. Ltd. (supra) would clearly apply to the facts of these cases. The clarificatory Board Circular and letters issued by the Development Commissioners clarifying the item to be consumables cannot be discounted and they are required to be taken into consideration. 12.2 To sum up : There is no merit in the Commissioners orders confirming demands and they are required to set aside by allowing the parties appeals. Parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal followed the meanings of these expressions as assigned in the Exim Policy in force during the material period. Consumables meant any item which participated and was required for a manufacturing process but did not form part of the end product. These were substantially or totally consumed during the manufacturing process. Raw material meant basic material which were needed for the manufacture of goods whether they had been previously manufactured or were processed or were still in a raw or natural state. 5. As per the decision of the Tribunal in Century Denim Others v. CCE case (supra), it transpires that granites are basic material that go into the production of granite slabs; the resin and hardner in question are consumables different from raw materials. Notification No. 23/2003-C.E. extends its benefit to goods manufactured wholly from indigenous raw materials. Use of imported consumables will not disentitle an EOU to the benefit of the said notification. Following also the ratio of the decision cited, the impugned order is held to be not in accordance with law. In the result the appeal is allowed with consequential relief, if any. This order was appealed again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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