TaxTMI 
TaxTMI 
2005 (12) TMI 199
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....otification prescribed that the goods cleared to DTA would be exempted as per rates prescribed therein subject to the condition that the said goods sold in DTA were only manufactured out of indigenous raw materials. The benefit is not eligible if the same is manufactured out of imported and indigenous raw materials. 3. The show cause notice dated 6-8-2004 was issued to the IGPL and the other appellant herein. The notice contended that IGPL were using imported raw materials viz. Vanadium Pentoxide in the manufacture Phthalic Anhydride and the said Vanadium Pentoxide according to the department was an essential, as an indispensable item, in the manufacture of the end product. It is the contention of the department that the manufacturing plant is common and no correlation could be established between the indigenous input/imported inputs and finished goods - Phthalic Anhydride manufactured out of indigenous inputs/imported inputs to conclusively prove that the final goods cleared to DTA is only manufactured out of the indigenous material only and therefore the benefit of the notifications claimed could not be extended. They were therefore asked to show cause as to why duty demands s....
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....inuously present in the reaction vessel to facilitate the oxidation of ortho-xylene. Noticee No. 1 is availing the benefit of Notification No. 23/2003-C.E. dated 31-3-2003 (Sr. No. 3 of the table) on the ground that only indigenous raw material are used in the manufacture of final products. Condition No. 3 reads : 3. "If - (i) The goods are produced or manufactured wholly from the raw material produced or manufactured in India, (ii) The goods are cleared in to Domestic Tariff Area in accordance with sub paragraphs (a), (b), and (h) or paragraph 6.8 of Export and Import Policy, and (iii) Such finished goods, if manufactured and cleared by the unit other than export oriented undertaking are not wholly exempt from duties of excise or are chargeable 10 "Nil" rate of duty. Hence for availing exemption under Sr. No. 3 or table to notification the goods are to be produced or manufactured wholly from the raw material produced or manufactured in India. Now let me examine whether the use of imported Vanadium Pentoxide can deny the benefit of the notification to the Noticee. As per definition given in Chapter 9 of the Exim Policy ....
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....o them and has to be denied forthwith. The case laws cited by Noticee No. 1 in support of the stand are based on Central Excise procedures and as such are on entirely different footing and they cannot be made applicable to the present case as the definition of raw material given in Exim Policy will have an upper hand in matters relating to EOU's. With utmost regard I humbly defer with the CEGAT's interpretation of the Supreme Court decision in the case of Ballarpur Industries Ltd case. The Supreme Court's decision related to the 4th type of ingredient mentioned in the case but the Court had prescribed the valid test for considering a product as a raw material which is reproduced below : "....One of the valid tests, in our opinion could be that the ingredient should be so essential for the chemical process culminating in the emergence of the desired end product that having regard to its importance in and indispensability for the process, it could be said that its very consumption of burning up its quality and value as raw materials. In such a case, the relevant test is not its presence in the end product, but the dependence of the end product f....
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....reme Court's decision in the case of CCE v. Ballarpur Industries Ltd. 1989 (43) E.L.T. 804 (S.C.). Though that decision dealt with various ingredients/inputs which may go onto the use in the manufacture of the final products including catalytic agents, yet the conclusions dealt with only such of the material which burn out and are consumed in the chemical reactions. Vanadium Pentoxide in the present appeal was used as a catalytic. It is settled position that a catalyst cannot be equated with and be raw material. The findings of the Commissioner that the catalyst, in this case, could be treated as a raw material therefore cannot be upheld. (b) The Notification 105/81, under consideration, in case of Ballarpur was considered by the Tribunal in case of Amrit Vanaspati v. CCE - 1988 (35) E.L.T. 479 wherein the Tribunal decided that a catalyst did not fall in the definition of "raw material." This definition has been followed & nothing contrary has been shown. Relying on the catena of decisions of this Tribunal Rashtriya Chemicals & Fertilizers Ltd. v. CCE - 1989 (42) E.L.T. 294 (Tri.) wherein the Bench has held that catalyst cannot be considered as raw material or componen....
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...." appearing in s. 167(8) of the Act cannot be interpreted to mean similar goods. It is not open to the Customs authorities to confiscate similar goods even though they may be of the same quality, bulk and value. The words 'such goods' mean the very goods which have been smuggled. If the smuggled goods lose their identity, it would not be open to the Customs Officers to confiscate any part of those goods. Where, therefore, gold that has been smuggled has in the melting process got so mixed up with gold that is unsmuggled that it is impossible to separate the smuggled gold from the unsmuggled one, the right to confiscate smuggled gold ceases when the two get unextricably mixed up. The broad proposition laid down by Desai J. undoubtedly supports the contention advanced on behalf of the appellants. We shall presently show that this statement of the law is not correct but it is necessary to mention at this juncture that in the Sonvavala's case (1960) 42 BLR p. (634) an innocent third party had purchased the smuggled gold for proper value and mixed the same with unsmuggled gold, which circumstance had an important bearing on the decision of the case. 9. In Institute ....
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....and Anr. v. The Union Marine Insurance Co. Ltd. (Law Reports (Common Pleas) 3. (1867-68) thus : "In our own law there are not many authorities to be found upon this subject but, as far as they go, they are in favour of the view, that, when goods of different owners become by accident so mixed together as to be undistinguishable, the owners of the goods so mixed become tenants in common of the whole, in the proportions which they have severally contributed to it. The passage cited from the judgment of Blackburn, J. in the case of the tallow which was melted and flowed into the sewers, is to that effect : Buckley v. Gross. And a similar view was adopted by Lord Abinger in the case of the mixture of oil by leakage on board ship in Jones v. Moore. "It has been long settled in our law, that where goods are mixed so as to become undistinguishable, by the wrongful act or default of one owner, he cannot recover, and will not be entitled to his proportion, or any part of the property, from the other owner, but no authority has been cited to shew that any such principle has ever been applied, nor Indeed could it be applied, to the case of an accidental mixing of the goods o....