TaxTMI 
TaxTMI 
1985 (6) TMI 114
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....inal manufacture of the products mentioned earlier. He had also further held that as such inputs purchased from the market were mixed up with similar inputs manufactured in the factory itself for captive consumption and they were all used together in further manufacture it was not possible to correlate the inputs (purchased from the market) and the final product. On appeal the Appellate Collector of Central Excise, Madras under his order dated 30-11-1981 set aside the order of the Assistant Collector and allowed benefit of Notification No. 201/1979 as well as No. 118/1975, holding that the two notifications could be worked together. Thereafter the Government of India issued, under Section 36 (2) of the Central Excises and Salt Act, a review show cause notice dated 6-10-1982 as to why the order of the Appellate Collector ought not to be set aside and the order of the Assistant Collector restored. It is the proceedings initiated under the said review show cause notice that, on transfer to this Tribunal, are being dealt with as an appeal before this Tribunal. 2. We have heard Smt. Vijay Zutshi, Senior Departmental Representative for the Appellant Collector and Shri C. Chidamba....
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....levant Notifications for consideration in this appeal are Notification No. 118/1975 dated 30-4-1975 and Notification No. 201/1979 dated 4-6-1979. Notification No. 1 118/1975 reads as follows: "Notification No. 118/1975; In supersession of the notification No.58/75-CE, dated 1-3-1975, goods falling under Item No. 68, manufactured in a factory and intended for use in the factory in which they are manufactured, or in any other factory of the same manufacturer, are exempt from the whole of the duty of excise leviable thereon; Provided that where such use is in a factory of a manufacturer, different from his factory where the goods have been manufactured, the exemption contained in this notification shall be allowable subject to the observance of the procedure set out in Chapter X of the Central Excise Rules, 1944: Provided further that nothing contained in this notification shall apply to complete machinery manufactured in a factory and meant for producing or processing any goods, even if they are intended for use in the same factory in which they are manufactured or in any other factory of the same manufacturer. The portion relevant to this appeal in Notification No. 20....
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.... the bought out inputs only (under T.I. 68) and not with reference to the similar inputs which were manufactured in the factory of the respondents and were captively consumed. This was evidently for the reason that with reference to the inputs manufactured in the factory and captively consumed, the immediate resultant goods were themselves free of duty as they also fell under T.I. 68 and were further being captively consumed. The dispute therefore is only with reference to the bought out goods under T.I. 68. 8. The reasoning of the Assistant Collector, which is reiterated in the show cause notice, is that the "said goods" mentioned in Notification No.201/1979 would be only the goods that are immediately manufactured by utilisation of T.I. 68 inputs and not the final end product. In this connection the learned Consultant for the respondents has drawn our attention to the observations in the decision of this Tribunal in Appeal No. E/299/85(C) (Order No.C/314/85) = [1985 (21) E.L.T. 901] in the case of Collector of Central Excise, Bhubaneshwar v. M/s. Tataghur Paper Mills. In paragraph 4 thereof it is observed - "a raw material is a material that is put into the manufacturing ....
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.... already obtained relief in Appeal No. ED.(MAS) 129/83 before the South Regional Bench of this Tribunal under their order dated 2-2-1985. 11. As far as the second reason stated in the Review Show Cause Notice for refusing benefit under Notification No. 201/1979 is concerned, here again we may notice that there is nothing in the words of the notification as would support the contention put forward in the Review Show Cause Notice. We may in this connection refer to two judgments of the Supreme Court. Though they did not deal with the terms of Notification No. 201/ 1979 yet the principle laid down in those decisions would appear to us to be relevant in assessing the contention put forward in the Review Show Cause Notice. In Union of India and others v. Tata Iron & Steel Company Limited [1977 E.L.T. J 61 (S.C.] it was observed in paragraph 23 as follows: " Second, Notification No. 30/60 grants exemption to duty-paid pig iron. The High Court rightly said that the Notification does not say that exemption is granted only when duty paid pig iron is used and that the exemption would not be available if duty-paid pig iron is mixed with other non-duty paid materials. If the intenti....