TaxTMI 
TaxTMI 
2008 (11) TMI 156
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....om a 100% EOU in DTA, provided the same are manufactured wholly from the raw materials purchased or manufactured in India. 2. Inasmuch as one of the materials i.e. WEBNIX-1065-3, being used by the appellant in the manufacture of their final product was imported, Revenue entertained a view that the benefit of the Notification would not available. Accordingly, a show cause notice was issued on 18-4-2002, denying the benefit in respect of the clearances effected during the period 25-2-1999 to 28-2-2000. The said notice was adjudicated by the Jt. Commissioner confirming demand of duty of Rs. 7,65,915/- along with imposition of identical penalty upon the manufacturer. In addition penalty of Rs. 2 lakhs was imposed on Shri Indravandan A. Modi,....
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.... part so as to invoke the longer period of limitation. Ld. Advocate drew our attention to the findings of Commissioner (Appeals), which are to the effect that since the Board's circular issued in 1998 was withdrawn on 31-1-2005, the benefit cannot be extended even when the earlier Board's circular of 1998 was in force during the relevant period 5-5-1998 to 31-1-2002. 4. Ld. DR reiterated the reasoning of the authorities below. 5. For better appreciation, we reproduce the use of WEBNIX, as contained in the impugned order of the Original Adjudicating Authority. "Webnix is a surfactant chemical used in the latex dipping tank of gloves manufacturing. This is added in latex solution as a de-foaming agent. The bubbles and air trapped in ....
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.... broader scope of the words "raw materials". Reference in this connection can be made to the view expressed in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. M/s. Thomas Stephen & Co. Ltd., Quilon 1988 Indlaw SC 913 and Coastal Chemicals Ltd. v. Commercial Tax Officer, A.P. and Ors. 1999 Indlaw SC 776. In the cases at hand "consumable" are treated differently from "raw materials". 6. In view of the above, the term "consumable", though fall within the broader scope of the raw materials, cannot be held to be raw material but has to be treated differently. The consumables get consumed in the manufacture of the final product. Even according to the definition in Para 3.13 of the EXIM Policy, it means that any i....
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....and the fact that the same was imported will not result in denial of the benefit of the Notification in question. 9. Apart from holding in favour of the appellant on merits, we also note that demand is squarely barred by limitation, show cause notice having been raised beyond the normal period. Admittedly, during the relevant period Board's Circular No. 389/22/98-CX., dt. 5-5-1998 was holding the field. After considering the disputed question the opinion expressed by the Board was as under:- "3. The matter has been examined by the Board and it is clarified that: (a) In respect of situation (i) above the benefit of Notification No. 8/97-CX dt. 1-3-1997 cannot be extended to those units which manufacture goods out of both imported an....