1996 (9) TMI 381 - AT - Central Excise

Tribunal Rules Nickel Catalyst & Alloy Powder Ineligible for Duty Exemption

The Appellate Tribunal CEGAT, New Delhi considered the eligibility of Nickel Catalyst and Nickel Aluminium Alloy Powder for duty exemption under ... Set off of duty - Catalyst Issues:Eligibility of Nickel Catalyst and Nickel Aluminium Alloy Powder for benefit under Notification No. 201/79 as amended when used for manufacturing Stearic Acid.Detailed Analysis:The appeal before the Appellate Tribunal CEGAT, New Delhi pertained to the eligibility of Nickel Catalyst and Nickel Aluminium Alloy Powder for the benefit under Notification No. 201/79 as amended when utilized in the production of Stearic Acid. The Asstt. Collector, Central Excise had initially rejected the claim, stating that these substances were not raw materials or component parts of the finished excisable products. However, the Collector of Central Excise (Appeals), Bombay, overturned this decision, emphasizing that the inputs need not necessarily become part of the final product. The Collector allowed the appeal by M/s. Bombay Oil Industries Pvt. Ltd.When the matter was called for hearing, no representation was made on behalf of the respondent despite a prior notice. As there was no request for an adjournment and considering the age of the case, the Tribunal proceeded to address the matter on its merits after hearing the arguments presented by Shri M. Jayaraman, JDR.The Tribunal delved into the provisions of Notification No. 201/79-C.E., which exempted excisable goods from duty if any goods falling under Tariff Item 68 were used as raw materials or component parts in their manufacture. The key contention was whether the Nickel Catalyst and Nickel Aluminium Alloy Powder qualified as raw materials or component parts. The Tribunal noted that these substances were used to accelerate or retard chemical reactions without being consumed or undergoing any chemical change themselves.Referring to precedents, the Tribunal cited the case law of CCE, Chandigarh v. Kashmir Vanaspati and Amrit Vanaspati Co. v. CCE, Meerut, where similar substances were held not to be raw materials or component parts eligible for exemption under Notification No. 201/79-C.E. The Tribunal also considered the definition of Catalyst from the condensed chemical dictionary, emphasizing the nature of substances that affect chemical reactions without being consumed or undergoing any change.After evaluating all relevant factors and aligning with the decisions in previous cases, the Tribunal concluded that the views of the Collector of Central Excise (Appeals) were incorrect. Consequently, the appeal filed by the Revenue was allowed, and the decision was made in favor of the Revenue.This detailed analysis provides insights into the legal interpretation and application of Notification No. 201/79-C.E. concerning the eligibility of specific substances for duty exemption based on their classification as raw materials or component parts in the manufacturing process.