TMI Blog1994 (4) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... is regarding eligibility of certain inputs for set off of duty under Notification No. 201/79, dated 4-6-1979. In all these cases the respondents were engaged in the manufacture of Liquid Glucose falling under Item 1E of the Central Excise Tariff. In Appeal Nos. E/257, 357, 359 and 364/86-D, they used activated carbon in the manufacture of Liquid Glucose and availed set-off of duty in terms of Notification No. 201/79 dated 4-6-1979 as amended. Similarly, they used `Indian Hip Resins in Appeal No. E/358/86-D and `Dicamol and resins in Appeal No. E/362/86-D and availed credit accordingly. According to the Department, after the amendment of the Notification No. 201/79 by Notification No. 105/82, dated 28-2-1982 the input duty relief was restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are not at par with the decision of the Supreme Court and, accordingly, previous decision of this Tribunal is distinguishable. The product might comprise of different types as it was explained by the Supreme Court in the above case in para 5 of the said order that the ingredients used in the chemical technology of manufacture of any end-product might comprise, amongst others, of those which may retain their dominant individual identity and character throughout the process and also in the end-product; those which, as a result of interaction with other chemicals or ingredients, might themselves undergo chemical or qualitative changes and in such altered form find themselves in the end-product; those which, like catalytic agents, while influ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation she would adopt the reasoning given in the order passed by the respective Assistant Collectors. 5. Arguing for the respondents Shri R.K. Jain submitted that this issue is squarely covered by the order of the Tribunal as per Order Nos. 58 59/94-D referred to above and precedent decision is binding on the Tribunal. Department has filed appeals on the ground that decision of the Tribunal in the case of Titaghur Paper Mills has not assumed finality since the Department has filed an appeal before the Supreme Court but now the issue is no longer res integra in view of the finality of this issue by the Apex Court in the case of Ballarpur Industries. It is not the case of the Department that item in question was an apparatus as can be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of Notification cannot be denied. The issue with reference to the set off of duty was first considered by the Supreme Court in the case of J.K. Cotton Spinning and Weaving Mills and same was followed in the case of Eastend Paper Industries Ltd., reported in 1989 (43) E.L.T. 201 (S.C.) and those two decisions were referred to in Ballarpur Industries Ltd., (supra) while arriving on the finality of this issue. He said that irrespective of the chemical reactions definitely there would be a physical change and furthermore it cannot be said that it was not consumed since it gets consumed gradually and ultimately the item has to be replaced. 7. In reply, Smt. Shanti Sundaram stated that deficiency in the quantity is not supported by a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials, Department was not justified in denying the benefit in terms of Notification even after amendment. Ballarpur decision was challenged in appeal before the Supreme Court and the decision of the Tribunal was upheld by the Supreme Court as referred to above [1989 (43) E.L.T. 804]. While upholding the view it was clearly held that items used in the end-product might undergo chemical or qualitative changes or while accelerating the chemical reactions, however may themselves remain uninfluenced and unaltered and remain independent of outside the end-product, still they are `Raw material for the end-product and are eligible for benefit in terms of Notification. The relevant test is not its presence in the end-product, but the dependence of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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