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TMI Blog2009 (3) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured to DTA in terms of relevant EXIM Policy under Notification No. 8/97, dated 1-3-1997, as amended from time to time, clarifying that the goods were manufactured out of indigenous raw cotton and hence 50% of the aggregate of duties of Customs as per Section 3 of Central Excise Act, 1944 were paid. 3. The Revenue after investigation came to the conclusion that the appellants did not manufacture the yarn sold in DTA wholly from raw materials produced or manufactured in India inasmuch as the appellants were using imported wax as consumables. It was the contention of the Revenue that the consumables were used in capital goods and they were alleged to have been used in the manufacture of cotton yarn which were sold in DTA. Coming such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has set aside the demand raised on the same ground. It was also submitted that department has allowed the benefit of exemption to other similar manufacturers and cannot take a different stand. It is the submission that Twin tests prescribed by the Hon ble Supreme Court in case of C.C.E. v. Ballarpur Industries Ltd. [1989 (43) E.L.T. 804 (S.C.)] and U.O.I. v. Ahmedabad Electricity Co. [2003 (158) E.L.T. 3 (S.C.)] should be satisfied whether the item is raw material or not. It is the submission that unless an ingredient satisfies both the above tests, it cannot be considered as a raw material. It is the submission that cotton yarn can be manufactured without using wax as a grazing material. 5. The learned SDR on other hand submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... main with the product till the end of its life. The Tribunal, in the case of Nahar Spinning Mills, has clearly held that the item Wax, used for grazing the yarn or the yarn being coated with Wax is only a Consumable. Furthermore, in terms of the experts, the wax is removed thoroughly before dyeing as stated by Dr. K.P. Chellamani, Deputy Director of SITRA. The evidence of Dr. K.P. Chellamani and Shri S.K. Patra, Director of Textile Ministry had clearly opined that the item is not a Raw material. The evidence of Shri B.P. Todankar, Senior Textile Technologist of the Bombay Textile Research Association is also in favour of the appellant. In view of the enormous evidence on record, the appellant s contention that wax is Consumable is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considers identical issue. We reproduced the finding portion of the said decision below :- 12. We have carefully considered the submissions and noted all the points including the citations. The matter pertaining to what raw materials are, has been dealt in great detail by Hon ble Apex Court in the case of C.C.E. v. Balarpur Industries Ltd. (supra). The relevant test laid down by the Apex Court is that the raw materials are the ingredient goes into the making of the end-product in the sense that without its absence the presence of the end-product, as such, is rendered impossible. This quantity should coalesce with the requirement that its utilization is in the manufacturing processes as distinct from the manufacturing apparatus . This t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 C.C.E. v. Balarpur 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 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 Commissioner s orders confirming demands and they are required to set aside by allowing the parties appeals. Part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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