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TMI Blog2017 (1) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... duties, instead of half of the aggregate of duties of customs, that ‘raw materials’ be domestically procured does not permit the latitude of treating ‘consumables’ as ‘raw materials.’ The adjudicating Commissioner has erred in doing so. The discharge of duties by the appellant-assessee on domestic clearances is legal and proper and, hence, warrants no interference - appeal allowed - decided in favor of appellant. - APPEALS No: E/635 & 636/2007 - ORDER No.A/94491-94492/16/EB - Dated:- 13-12-2016 - Shri M V Ravindran, Member (Judicial) And Shri C J Mathew, Member (Technical) Ms. Vijaya Birmole, Advocate for the appellant Shri Ajay Kumar, Jt. Commissioner (AR) for the respondent Per: C J Mathew: The appellant, M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Customs, Nashik confirmed the demand, imposed penalty of like amount under section 11AC of Central Excise Act, 1944 and impose penalty on the Managing Director leading to these appeals. 4. The core of the dispute is the contention of Revenue that appellant utilises barium chloride , corundum sand , anti-corrosion oil and stamping ink which were allegedly imported for manufacture of the goods cleared into the domestic tariff area; the adjudicating Commissioner held that the first two are raw materials and the other two are consumables rendering the appellant-assessee ineligible for the concessional rate of duty on domestic clearances. 5. Appellant contends that only such clearances as are manufactured out of imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined by the manufacturing process and is best left to the appellant. Therefore, if a user chooses to categorise the wherewithal for manufacture in a particular category that must, in the absence of any other evidence, be accepted. No evidence that these four items are not consumables is perceptible in the show cause notice or the impugned order. It is also clear from the exemption notifications pertaining to domestic clearance that the restriction on use of imported goods is limited to raw materials. 8. What we have concluded above is not as startling as it may appear to be on first and superficial perusal. It is not a blanket mandate to assessees to seek opportunistic categorisation to evade duty. To comprehend this propositi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for clearance at the rate of excise duty, as applicable to domestic industry, imported raw materials must be used. We also see that the categorisation adopted by an assessee is attendant with perils that would cause a assessee to pause and ponder before taking the risk of claiming that a raw material is a consumable ; for a prudent businessman, the costs of immediate gain, in the long run, may well be too high to pay. 10. It would appear that the circular of Central Board of Excise Customs supra cited by Learned Authorized Representative has been issued without comprehending this fundamental. It is also moot whether the benefits of a statutory instrument issued under section 5A of Central Excise Act, 1944 can be constrained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumed therein. It is for this reason, a departure was made from the concept that consumable fall within the broader scope of the words raw materials . Reference in this connection can be made to the view expressed in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. M/s. Thomas Stephen Co. Ltd., Quilon [1988 (2) SCC 264] and Coastal Chemicals Ltd. v. Commercial Tax Officer, A.P. and Ors. [1999 (8) SCC 465] . In the cases at hand consumable are treated differently from raw materials . makes it even more apparent that these expressions are to be read with reference to the context. The context of the exemption afforded to materials imported by export oriented units and the condition stipulated for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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