TaxTMI 
TaxTMI 
2009 (10) TMI 258
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....d by the Commissioner of Central Excise, Belgaum, in Order No. 9/2004, dated 12-7-2004 was set aside. 2. The facts leading to this appeal are as follows: The respondent herein is a 100% Export Oriented Unit engaged in the manufacture of combed grey cotton yarn of various counts falling under Chapter Heading 5205 of Schedule to Central Excise [Tariff] Act. The cotton yarn manufactured by the respondent herein is cleared for export as well as for sale in India also referred to as Domestic Tariff Area which is effected on the basis of permission given by the Assistant Development Commissioner, Kochin Export Sub-Office, Bangalore, from time to time. The said DTA clearance is secured by the respondent availing benefit of Notification No. 8....
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....ing is a raw material which was challenged by the respondent herein in an appeal before the CESTAT in appeal No. 1068/2003 wherein the order of the adjudication authority was set aside and the matter was remanded for fresh enquiry by its order dated 13-8-2003. In the said proceeding it was held by the Adjudicating Authority that the wax used in the manufacturing of cotton yarn is not a consumable and is a raw material and that if one of the raw materials used in the manufacturing process is not produced and manufactured in India, the benefit of exemption under Notification No. 8/97 would not be available to the assessee. In the instant case the wax which is used in the process of manufacturing the cotton yarn being imported from Germany, th....
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.... Adjudicating Authority as well as the Tribunal this Court answers the aforesaid substantial questions of law in the affirmative for the following reasons. 7. Since all the five substantial questions of law are inter-connected, they are discussed together. 8. In the instant case the basic produce which is manufactured by the respondent is cotton yarn. The wax rolls which are imported by the appellant herein is utilized for manufacturing of yarns to maintain co-efficiency of friction in a particular range to avoid excessive yarn break as well as needle break, i.e., use of wax is basically to maintain the co-efficiency of friction between the yarn and metal. The wax will not become part of the end-product. Before deciding whether the wa....
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....gard to its importance in and indispensability for the process it could be said that its very consumption or burning up is its presence in the end-product, but the dependence of the end product for its essential presence at the delivery end of the process. The ingredient goes into the making of the end-product in the sense that without is absence the presence of the end-product, as such, is rendered impossible. This quality should coalesee with the requirement that its utilization is in the manufacturing process as distinct from the manufacturing apparatus..." 10. Reading of the definitions 'consumables' and 'raw materials' in the light of discussion made by the Hon'ble Supreme Court in the aforesaid decision clearly discloses that the r....