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TMI Blog2002 (11) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... nim fabric, which is made out of the cotton yarn produced by the petitioner. The Denim cloth being so manufactured is thus a variety of textile product. The Denim so manufactured is in two varieties, namely coloured Denim and grey Denim. As per petitioner's case under Chapter 52 of the Central Excise Tariff Act, 1985, which deals with cotton, the Denim fabrics produced by the petitioner is covered by sub-heading 52.07 of the Tariff. Vide Notification No. 8/97, dated 1-3-97, the Government of India has permitted payment of Central Excise duty at the same rate at which goods produced by an EOU, provided the goods are manufactured by a 100% EOU wholly from raw material produced or manufactured in India. It was further submitted in the petition that the petitioner's product Denim fabrics is wholly produced from cotton yarn and the petitioner Co. is availing the benefit of the aforesaid Notification since 1977. 3.The Commissioner of Central Excise Customs, Indore issued a notice dated 3-2-98 (Annexure-P/6) to the petitioner Co. to show cause why benefit of this Notification be not denied, as they are using 'Indigo pure' in the manufacture of Denim fabrics, which is an imported raw m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following order : "The impugned order dated 30th June 2001 of the Customs, Excise Gold (Control) Appellate Tribunal, New Delhi does not call for any interference. The appeal fails and is dismissed." But the petitioner Co. has filed this writ petition before this Court, challenging the order of the Tribunal. It is also not in dispute before me that thereafter the Commissioner vide fresh order dated 18-1-2001 has again decided the matter, against which the Company has filed fresh appeal before the CEGAT, which is pending for disposal. 7.I have heard Shri S.S. Ray, learned Senior Counsel for the petitioner at length. Shri A.P. Patankar appeared for the respondent/Commissioner, Central Excise Customs and submitted only short arguments in writing. I have also perused the record. 8.Shri Ray, learned Senior Counsel very attractively, strenuously and vehemently submitted before me that the learned Tribunal has not correctly considered the language of Notification and has not considered the effect of this beneficial Notification, whose benefit is available, which has to be given to the petitioner Co. The learned Tribunal has also not considered the scope of the Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Co. as the petitioner Co. has already made a challenge to the said order in writ petition under Article 226 of the Constitution. He also cited the definition of raw material from Schedule-I of Cost Accounting Records Textile Rules, 1977, according to which a separate stock is to be maintained for raw materials and dyes and chemicals. He further produced Accounting Auditing Technical Guide on Textile Industry and submitted that for stock accounting a separate account has to be maintained for raw material-cotton purchased yarn based etc. - for dyes and chemicals and submitted very vehemently that the basic raw material for the production of Denim fabric is cotton, which is wholly produced in India, the use of dye is consumable, therefore, the 'Indigo pure' dye is not a raw material in any case. 10.In reply, learned Counsel for the respondent/Union of India only submitted written arguments by way of synopsis of the case and submitted that the issue has already been decided by the CEGAT, which has not been challenged by the petitioner by the way of filing any appeal as prescribed under Section 35-L of the Central Excise Act and moreover the Supreme Court has finally decided the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity and value as raw material. In such a case the relevant test is not its absence in the end product, but the dependence of the end product for its essential presence at the delivery end of the process. The ingredient goes into the making of the end product, as such, is rendered impossible. This quality should coalesce with the requirement that its utilisation is in the manufacturing process as distinct from the manufacturing apparatus". 13.Shri Ray, learned Counsel for the petitioner very finely distinguished the application of the said judgment on the facts of this case and submitted that the ratio of the aforesaid judgment in the case of M/s. Ballarpur Industries Ltd. (supra) is not applicable to the facts of this case, because in the said case of Ballarpur Industries Ltd., the presence of Sodium Sulphate, in the manufacture of paper is a must, but in this case the basic raw material for the production of Denim fabric is cotton and use of imported 'Indigo pure' dye is negligible and its use is consumable and it is not must for the production of Denim fabric, which is purely a cotton fabric. Therefore, the finished product is not wholly produced or manufactured from imported ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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