TaxTMI 
TaxTMI 
1987 (7) TMI 234
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....product are entitled to the benefit of notification No. 201/79-CE (hereinafter referred to as the said Notification) or not. Another question that would arise is whether the demand raised by the Revenue against the appellants was in time. 3.  The admitted facts are that nickel catalyst is used as a catalyst in the production of vegetable products. It appears that there cannot ordinarily be production of vegetable product on a commercial scale without the use of catalyst. The said Notification grants exemption to goods falling under item No. 68 CET in the following parts :- "Set off of duty on all excisable goods on use of duty paid goods falling under item 68 (Tariff items 1 to 68). - In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 178/ 77-Central Excises, dated the 18th June, 1977, the Central Government hereby exempts all excisable goods (hereinafter referred as "the said goods"), on which the duty of excise is leviable and in the manufacture of which any goods falling under Item No. 68 of the First S....
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....claration as prescribed by the said notification was enclosed. He, however, had no evidence to show that such a declaration reached the Department. At this stage we questioned the SDR who stated that no such declaration is on file. Shri Lachman Dev stated that on 6-9-1982 another declaration was filed and explained that though credit was taken prior to 6-9-1982, the credit was not availed of after 6-9-1982. He submitted that filing the declaration was only a technicality and the failure to observe the technicality should not act as a bar to the appellants from availing the benefit of the said notification. 8.  The learned Consultant argued that Section 11 A of the Central Excises and Salt Act applied to the instant demand and therefore the time-bar prescribed therein applied to the demand, which was raised after more than 6 months from the relevant date. Referring to the Revenue's appeal, he submitted that having raised the demand under Section 11 A the Revenue now cannot argue that Section 11 A of the Act did not apply. 9.  Shri Shishir Kumar, the learned SDR opposing the arguments submitted that the nickel catalyst is neither a raw material nor a component part. H....
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....or components parts. The first two conditions apply to what may be called the outputs. There is no dispute about the same. Condition No. (iii) applies to inputs. It is not anybody's case that the nickel catalyst does not fall under item No. 68 CET. 15.  That brings us to the 4th condition. This condition is that the inputs should have been used as 'raw materials' or 'components parts'. The use of nickel catalyst in the manufacture of vanaspati appears to be as a cleaning agent in the manufacture of the said vegetable product. The manufacture of vegetable product does not stop with the use of catalyst. After emergence of the vegetable product, the catalyst is not present in the final product. Therefore, the catalyst 'cannot be considered to be raw material. 16.  This view is strengthened by the meaning of the word 'raw material' contained in the Law Lexicon by Shri T.P. Mukherjee, 1982 (Vol. 2). RAW MATERIAL "Raw material, as commonly understood, is used in process of manufacture. Printing machinery will certainly not come under the category of "raw material". - In re K.T. Kosalram, A.I.R. 1986 Mad. 113 at 116 : 1967 Mad. L.W. (Cri.) 48 : (1967) 1 Mad. L.J. ....
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.... in which case, the elements forming the component parts may not be capable of any more separate identification. Equally, it may be that when a machinery is assembled out of several parts forming that machinery, those parts even after their being fitted may retain their individuality or identity." 19.  It is the admitted position that the nickel catalyst is not present in the final vegetable product. Probably its presence in the final product constitutes a health hazard. Considering the above extract from the Law Lexicon we have no hesitation in holding that nickel catalyst is not a component part of vegetable product. 20.  As a result, we find that nickel catalyst cannot be considered as a "raw material" as a "component part". Therefore, nickel catalyst used in the manufacture of vegetable product cannot be extended to the benefit of the said Notification No. 201/79 CET. 21.  The question that then arises is whether the demand raised by the department is time-barred. The Revenue's argument is that the Notification itself provides for recovery of the credit availed of without any time limit and, therefore, there cannot be a question of time-bar under Section....