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2009 (10) TMI 258 - HC - Central ExciseExemption- Notification No. 8/97-CH, dated 1-3-1997- It is the case of the respondent that they are importing wax from Germany which is used in the process of manufacturing of cotton yarn. The said wax is being used by them as consumable in the process of manufacture of cotton yarn, which according to the respondent is not raw material in the process of manufacturing the cotton yarn, based on that they have availed the benefit under the aforesaid notification. According to the appellant herein, the said wax which is imported by the respondent company is not a consumable, it is a raw material without which the cotton yarn cannot be manufactured by the respondent. It is the case of the appellant that Director General of Central Excise Intelligence, Bangalore on investigation found that the wax used by the respondent in the process of manufacturing of cotton yarn, is a raw material. Accordingly a show cause notice was issued to respondent. Thereafter the adjudication authority by its order held that respondent is not eligible to claim benefit of Notification No. 8/97, dated 1-3-1997 on the ground that the wax used by them in the process of manufacturing 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. Held that- The one and only purpose for which the said wax is used by the respondent herein is to reduce the friction between the metal and the yarn in the process of its manufacturing, the absence of it does not render manufacturing process impossible. On the contrary it would only smoothen the process of manufacturing. Therefore use of the wax could not be considered as a raw material in the process. In the result this Court is of the opinion that the finding of the CESTAT, holding that the said wax is a consumable and not a raw material is correct. Therefore the respondent availing the benefit of Notification No. 8/97-C.E., dated 1-3-1997 is in order. Accordingly the appeal filed by the Revenue is dismissed answering the aforesaid substantial questions of law in favour of the respondent herein.
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