1990 (9) TMI 179 - AT - Central Excise

Interpretation of 'Intermediate Goods' for Tax Exemption Eligibility

DURGAPUR STEEL PLANT Versus COLLECTOR OF C. EX.

DURGAPUR STEEL PLANT Versus COLLECTOR OF C. EX. - 1991 (52) E.L.T. 244 (Tribunal) Issues:1. Whether Blast Furnace Gas and Coke Oven Gas qualify as intermediate goods under notification No. 58/75 dated 1-3-1975 amended by notification 77/75 dated 6-3-1975.Analysis:The case involved a dispute regarding the classification of Blast Furnace Gas and Coke Oven Gas as intermediate goods under the relevant notifications. The lower authorities interpreted intermediate goods as those arising in a process of manufacture and getting converted or used in the final product within the same process. The appellant, however, argued that the definition of intermediate goods should be broader, as per observations by the Member, Central Board of Excise & Customs. The Tribunal noted that the term 'intermediate goods' was not clearly defined and agreed with the appellant's interpretation that it should not be limited to goods arising at an intermediate stage in the same process of manufacture. The Tribunal held that goods used in the course of manufacture in a factory of production and falling under the relevant category would qualify for exemption, even if they arise in different processes within the same factory. Since Blast Furnace Gas and Coke Oven Gas were produced and used in the same steel plant for manufacturing products, they were deemed to be intermediate goods, entitling the appellant to the exemption.The Tribunal rejected the argument regarding the binding nature of the Member's interpretation on the Collector (Appeals) since appeals from the Collector (Appeals) do not go to the Central Board of Excise & Customs in its appellate capacity. However, the Tribunal found the Member's interpretation relevant due to the absence of a clear definition of intermediate goods. The Tribunal emphasized that the intention of the notification was to provide exemption to goods used in the manufacturing process within the same factory, regardless of whether they arose at an intermediate stage in the same process or in a different process within the same factory. As Blast Furnace Gas and Coke Oven Gas were integral to the manufacturing process in the steel plant, the Tribunal allowed the appeal on its merits.The Tribunal refrained from addressing the issue of time bar raised by the appellants due to insufficient material on record regarding the classification list filed by the appellant. Without the approved classification list, the Tribunal could not make a determination on the plea of time bar. Given the findings on the entitlement to the exemption under the relevant notification, the Tribunal allowed the appeal based on the merits of the case.