M/S.·ASIAN PEROXIDES LTD. v. COMMNR. OF· CENTRAL EXCISE, GUNTUR

[2008] 10 S.C.R.132

- A . (Civil Appeal Nos.5842-5843 of 2004) JULY 7, 2008 B [DR. ARIJIT PASAYAT, P._ SATFIASIVAM AND AFTAB ALAM, JJ.]

for Hydrogen Peroxide manufactured and cleared by it .to tire Domestic Tariff Area. The adjudicating authority de- clined the benefit as it did not accept the case of the as- sessee that the finished goods were man_ufactured wholly from ra"'!.materia!s produced in India. The Commissioner F (Appea.ls) accepted the claim of the assessee that the · items used in manufactui::ing_ the finished products were not raw materials but o·n1y consumabl.es. However, the CESTAT allowed the appeals filed by the revenue. Ag".' grie..ved, the asse$see filed the instant appeals. ·G' . . . ,..; . c

M/S. ASIAN PEROXIDES LTD. v. COMMNR. OF _ 1-33 CENTRAL EXCISE, GUNTUR

pugned judgments are set aside. The matter is. remitted A to the CESTAT in each case to deal with it afresh in accor- dance with law. The CESTAT while doing so shaJI keep in view the decision of this Court in the case of V.anasfhali Textiles Industries Ltd.* [Para 8] [136-F & G] *Vanasthali Textiles Industries Ltd. v. Commr. Of C. Ex., B Jaipur, Rajasthan 2007 (218) ELT. 3(SC); relied on. CCE v. Ballarpur Industries Ltd. (1989) 4 SCC 566 and Commissioner of Central Excise & Customs, Indore v. Cen- tury Denim (2001) 129 ELT 657(T) referred to. · c CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.·. · 5842-5843 of 2064 From the final Order. No. 422 and 423/2004 dated .4/ZI 2004 of the Customs, Excise & Service Tax Appellate Tribunal, 0 South Zonal Bench, Bangalore, CircOit Bench at Hyderabad in Appeal No. E/181-182/2001 WITH C.A. No. 3644-3645 of 2005 E Alok Yadav, Rajesh Kumar and M. P. Devnath for the Ap- pellant. I. Venkatanarayana, Navin Prakash, Rahul Kaushik and ·l B.. Krishna Prasad for the Respondent. · · F The Ju_~gment of the Court was delivered by· Dr. ARIJIT PAS~YAT, J. 1. In these appeals challenge is to the order by the Customs Excise and Service Tax Appellate Tri- bunal, South Zonal Bench, Bangalore (in short the '1CESTAT'). Before the CESTAT the issue related to the eligibility of the ap- G pellantfor the benefit of exemption under Notification No.8/97- CE dated -1.3.1997 for Hydrogen Peroxide manufactured and cleared by the appellant to the Domestic Tariff Area ( in short the 'OTA'). -The Notification .in question .exempts finished products- ,, manufactured in a 100%_ Export Oriented Unit (in short_ the 'EOU') ,H

134 SUPREME -COURT REPORTS [2008] 10 S.C.R. . ~· .. A wholly from the raw materials produced or manufactured in India - ~ and allowed to be sold in India from so much of the duty of excise leviable thereon under Section 3 of the Central Excise Act, 1944 (in short the 'Act') as is in excess of amount equal to the duty of . excise leviable under Section 3 of the Act on like goods pro- B . duced or manufactured in India other than in a 100% EOU.

2Copy pinpoint2. The original authority did not accept the stand of the _appellant that the finished goods namely Hydrogen Peroxide . removed .by them from their EOU to the OTA was manufactured wholly from the raw materials produced in India. ,. c 3. Aggrieved by the adjudication, assessee appellant filed an appea! before the Commissioner of (Appeals) Excise who accepted the contention of the appellant that the above men- tioned items are not raw materials but only consumable and, therefore, assessee cannot be denied the benefit of exemption -D under Notification no.8/97 in respect of several raw materials (11 in number). The revenue preferred appeals before the CESTAT. - By the impugned order in each case CESTAT ac- cepted the s!and of the revenue. It was held that the respondent was not entitled to the benefit of Notificati911No, 8/97.

4Copy pinpoint4. It heJd that in Commissioner of Central Excise & Cus- toms, Indore v. Century Denim (2001) 129 ELT 657 (T) the Tri- bunal applied the tests enunciated by this Court namely, whether it is an ingredient which goes into the making of the end product in the sense that without_ its presence the end product, as such is - · F -· renderea impossible and took the view that indigo _pure dye,·-lycra ·and other important fixing agents utilized in__ the manufacture of denim fabrics are_ raw materials and not consumables. µ _s. A~cording' to the learned c;ounselfor the appellant the materials in question are not raw materials b~t consumable as G per definition in para 3.13 of the EXIM Policy. According to the definition of 'consumable' it means anYitem which participates

-- 'in or is required for manufacturing process but does noHorm part of the end"product. items which are substantially or totally - consumed during manufacturing _process will be deemed to be · 'H -consqmable:. According to para 3.41 of the policy, raw n:aterial