TMI Blog1985 (6) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise under his order dated 14-8-1981 held that they were not entitled to such benefit since these inputs had been utilised only in the manufacture of other excisable goods which themselves were exempted from duty by reason of Notification No. 118/1975, such intermediate products being consumed captively in the course of further manufacture resulting in the final manufacture of the products mentioned earlier. He had also further held that as such inputs purchased from the market were mixed up with similar inputs manufactured in the factory itself for captive consumption and they were all used together in further manufacture it was not possible to correlate the inputs (purchased from the market) and the final product. On appeal the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect matter of the review show cause notice. When enquired about the disposal of the said writ petitions he stated that writ petitions 6907 of 1983 and 6908 of 1983 (relating to the impugned order-in-appeal) had been disposed of by the Hon ble High Court without orders in view of the pendency of the present appeal before this Tribunal. He further stated that so far as writ petition No. 6668 of 1980 the same did not relate to Notification No. 201/1979 but to Notification No.178/1977 and further the issue raised in the said writ petition was regarding rejection of the appeal by Collector as time barred and hence the said writ petition has nothing to do with the matter now in issue before us. 4. The respondents have in their paper book furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing contained in this notification shall apply to complete machinery manufactured in a factory and meant for producing or processing any goods, even if they are intended for use in the same factory in which they are manufactured or in any other factory of the same manufacturer. The portion relevant to this appeal in Notification No. 201/1979 is as follows: In supersession of notification No.178/77-Central Excises, dated the 18th June, 1977, all excisable goods (hereinafter referred as the said goods"), on which the duty of excise is leviable and in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) have been used as raw materials or component par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up and used in the manufacture of further goods the duty relief under Notification No.201/1979 cannot be exactly determined or quantified. It was for both the above reasons that the Government intended to set aside the order of the Appellate Collector and restore the order of the Assistant Collector. 7. It is clear from the Assistant Collector s order, and also confirmed by Shri Chidambaram, that the exemption under Notification No. 201/1979 was claimed with reference to the bought out inputs only (under T.I. 68) and not with reference to the similar inputs which were manufactured in the factory of the respondents and were captively consumed. This was evidently for the reason that with reference to the inputs manufactured in the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o manufacture paper. This is a wrong understanding of an input or a raw material. There is no authority to say that an input or raw material must go directly into the finished product. As long as it is consumed and utilised in a way that results or helps in the production or manufacture of the article in which the system is engaged, it is a raw material and is an input for that finished product." 9. Reading the words of the Notification also we are unable to subscribe to the view put forward in the Review Show Cause Notice. The Appellate Collector has drawn support from Rule 56A for the view that he expressed, that the duty paid on inputs could be finally set off on the duty payable on the final manufactured product though the input may h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in this connection refer to two judgments of the Supreme Court. Though they did not deal with the terms of Notification No. 201/ 1979 yet the principle laid down in those decisions would appear to us to be relevant in assessing the contention put forward in the Review Show Cause Notice. In Union of India and others v. Tata Iron Steel Company Limited [1977 E.L.T. J 61 (S.C.] it was observed in paragraph 23 as follows: Second, Notification No. 30/60 grants exemption to duty-paid pig iron. The High Court rightly said that the Notification does not say that exemption is granted only when duty paid pig iron is used and that the exemption would not be available if duty-paid pig iron is mixed with other non-duty paid materials. If the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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