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TMI Blog2016 (12) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... s), Pune-III upholding the order of lower authority demanding differential duty of Rs. 17,61,920 along with interest and imposition of penalty of like amount under section11AC of Central Excise Act, 1944 read with rule 25 of Central Excise Rules, 2001/2002 for February 2002 when cotton yarn was cleared into the domestic tariff area (DTA). 2. Appellant is a 100% Export Oriented Unit manufacturing cotton yarn. They claim to maintain separate records for manufacture of goods for export and for domestic clearance. Under the scheme for such units, clearances to domestic tariff area (DTA) are effected on payment of excise duty equivalent to appropriate customs duty as applicable on import of goods. However, by complying with the conditions of no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issue was dealt with by the Apex Court in Collector of Central Excise v. Ballarpur Industries Ltd.. - 1989 (43) E.L.T. 803 (S.C.). Their Lordships categorized raw materials into three groups (a) those which may retain their dominant individual identity and character throughout the process and also in the end-product; (b) those which, as a result of interaction with other chemicals of ingredients, might themselves undergo chemical or qualitative changes and in such altered form find themselves in the end-product and (c) lastly, those which like catalytic agents, while influencing the chemical reactions, however, may themselves remain uninfluenced and unaltered and remain independent of and outside the end-product, like those which might b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess understands the same. According to him, when a manufacturer is asked about the raw materials used in the manufacture of denim cloth, no one will state that it is manufactured from indigo pure. The common man will certainly say that the raw material is cotton. That cotton was admittedly procured from within the country. Therefore, the contention of the Revenue cannot stand. This submission of the learned Counsel is very attractive. The question that is to be asked is not what is the basic raw material from which the finished product is manufactured, but the question is what materials go into the manufacture of the finished product. If such a question is asked, namely, what materials have gone into the production of the finished product, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced by the learned Counsel that the materials with which we are concerned in these appeals are consumables. 5. Learned Counsel for appellant submits that later decisions of the Tribunal in Super Spinning Mills [2013 (296) ELT 133 (T) and Forbes Gokak Ltd [2005 (192) ELT 1000 (T)] have taken a different view that has found approval with Hon'ble Supreme Court. 6. We find that these judgements deal with the distinction between consumables and raw materials which supports the contention of appellant that the conditions of notification are breached only if raw material is imported and used for manufacture of goods that are cleared into the domestic tariff area. 7. However, a more fundamental issue has not been considered by the lower author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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