TaxTMI 
TaxTMI 
1987 (1) TMI 215
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....uminium, flouride, borax, lime cannot be termed raw materials for the purpose of manufacture of aluminium to gain the benefit under Notification No. 201/79-CE amended by Notification No. 105/82-CE which provides for duty exemption on goods in the manufacture of which any goods falling under Item 68 have been used as raw materials or component parts. The exemption is from so much of the duty of excise as is equivalent to the duty of excise already paid on the raw materials or component parts. The reasons he gives for holding that the cryolite, aluminium, flouride and others are not raw materials are reproduced below :- The term raw material is not defined in the Central Excises and Salt Act, Central Excise Rules or Notification No. 201/79....
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....ufacture of caustic soda as none of its constituents are represented in the final product, the caustic soda. The discussions by the Asst. Collector are sound; but in the context of the problem, they lead to even greater problems, for which his reasoning will provide no solution. It is quite correct that crude petroleum is the raw material from which naphtha is obtained; and naphtha is the raw material from which benzene, toluene, xylene are obtained. It is also correct to say that yarn is the raw material for the manufacture of cloth, and that yarn is a constitutent of the cloth. 3. However, by this reasoning, no exemption can be given under notification No. 201/79-CE. Naphtha does not fall under Item 68 nor does yarn. For the ma....
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....the manufacture of aluminium as process of manufacture of aluminium is not commercially viable without the use of these materials but this only is not sufficient to allow the party to avail set-off of duty paid on these materials against the duty payable on aluminium". There is no further need to labour the point further or to establish use of these goods; but it will be wise to briefly explore the function of these materials. The Assistant Collector has given useful hints. 5. Lime is added to and mixed with bauxite before digestion with caustic soda for the control of phosphates, sulphates and carbonates contained as impurities in the bauxite and for the in-plant causticisation of liquor. It also helps in the separation and settlin....
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....ssistant Collector allow exemption only equal to the duty paid on aluminium on alumina? How does he calculate it? 8. In his own way, the Assistant Collector is not incorrect and his ratiocination would be tolerable if the matter stopped there. But it does not stop there; it begins there: if one took just the alumina, one would have a long, long wait for the aluminium to come out, and even then it would not. The cryolite borax, lime are necessary to the reduction and decomposition of the alumina to free the metal, aluminium, to a recoverable state. And come to it, the Assistant Collector does not say if he allowed exemption on the aluminium on account of the aluminium oxide - evidently not, the reason, perhaps being that duty under I....
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....under which the demands were made. This section however does not permit such demands to be made and there is no authority under this section for such action. This section deals with any duty of excise which "has not been levied or paid or has been short levied or short paid or erroneously refunded." The credit held to be wrong by the Assistant Collector are not duties of excise which have not been levied or which have been short levied or short paid, and this Assistant Collector has no authority to recover duty on the cryolite, lime, borax, aluminium etc. because these are not goods whose assessment he has any powers over. If any duty on these goods is short levied or short paid, the Assistant Collector at the factory where they were made i....