Consumables versus raw material in granite slab manufacture: imported epoxy resin did not defeat concessional duty eligibility.

Imported epoxy resins used only to fill hairline cracks, fissures and holes in polished granite slabs were treated as consumables, not raw material, because the slabs were manufactured from indigenous granite blocks. On that basis, the condition requiring production or manufacture wholly from raw materials produced or manufactured in India was not breached, and the concessional duty under Notification No. 23/2003-C.E. remained available. The duty demand was therefore unsustainable.

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Issues: Whether imported epoxy resins used in polishing polished granite slabs manufactured from indigenous granite blocks constituted 'raw material' so as to deny concessional duty under Notification No. 23/2003-C.E. dated 31-3-2003.

Analysis: The slabs were manufactured from indigenously procured granite blocks, and the imported epoxy resins were used only to fill hairline cracks, fissures, or holes arising during cutting and polishing. The Tribunal followed its earlier view that such resins were not raw material but merely consumables, and noted the Development Commissioner's clarification supporting that understanding. On that basis, the imported resins did not defeat the condition that the goods be produced or manufactured wholly from raw materials produced or manufactured in India.

Conclusion: The imported epoxy resins were not raw material for the manufacture of the polished granite slabs, and the assessee was eligible for the concessional rate of duty under Notification No. 23/2003-C.E. The duty demand was unsustainable and the appeal was allowed in favour of the assessee.

Ratio Decidendi: Materials used only as consumables in the manufacturing process do not amount to disqualifying raw material for denying exemption when the substantive raw material is domestically procured and the notification condition is otherwise satisfied.

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