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TMI Blog1986 (6) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... 979 as amended by Notification No. 105/82 dated 28-2-1982. The chemicals or products in question are Cryolite, Calcium Fluoride, Aluminium Fluoride, Boric Acid, "Degasser" and "Coverall". The Assistant Collector had held that these were not eligible for exemption under the notification as amended. The Collector (Appeals) took the opposite view and held them as eligible for exemption. The Collector has come up in appeal against the order of the Collector (Appeals). 2. At the outset a question arose whether "Annexure D" to the appeal, purporting to be a copy of the opinion dated 22-3-1984 by the Chief Chemist, Central Revenues, regarding the chemicals in question could be taken on record. Shri Jain objected to such an opinion being now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess, the rest of it was recovered and recycled. Shri Verma therefore submitted that the order of the Collector (Appeals) was wrong on merits. 5. In para 5 of the order of the Collector (Appeals), it had been held that the demand for duty would be subject to the normal time limit of six months. Shri Verma submitted that this finding was not correct. He referred to an order of the South Regional Bench of the Tribunal, reported in 1986 (7) ETR 399, in the case of Premier Tyres Limited. In that case the Bench had expressed a prima facie view that the provisions of Section 11 A, Central Excises and Salt Act, would not apply in a case where a manufacturer had wrongly taken credit of duty in terms of Notification No. 201/79. 6. Shri Verm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The coverall was used to protect the metal after degassing, against further pick-up of gases from the atmosphere. 9. Shri Jain referred to the Tariff Commission Report on the Aluminium Industry (1971). In para 4.7 of the report, under the heading "raw materials", mention has been made of cryolite and aluminium fluoride. Shri Jain submitted that this would show that these two substances were considered as raw materials in the manufacture of aluminium. He also relied on extracts from a publication "The World Aluminium Industry" by "Australian Mineral Economics Pty Ltd." Here again there was reference to the raw materials required for producing aluminium. Under this heading cryolite, aluminium fluoride and calcium fluoride had been men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isation etc., and does not form a part or ingredient of the finished goods. (2) Aluminium Fluoride : Its main action is to supplement the cryolite, whose function has been described earlier. (3) Calcium Fluoride : Its main function is to reduce the melting point of cryolite so that the electrolysis can be carried out at a lower temperature. (4) Boric Acid : It is mainly used to remove titanium and vanadium, which have injurious effect on the electrical conductivity of electrical grade aluminium metal. (5) Degasser : It is a complex chemical compound added to the molten aluminium to remove gases dissolved in the metal which would otherwise give rise to porosity and formation of cavities. (6) Coverall : It is also a mixture of certain ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e finished paper." It is not necessary for us again to discuss at length what should be the function of a substance to qualify as a raw material for the purpose of Notification No. 201/79. Suffice it to say that we fully agree with the observations of the Tribunal in this regard in the above mentioned two orders. 17. So far as the particular chemicals in this case are concerned, it is quite clear that all of them are used in the process of separating aluminium metal from alumina and producing ingots etc. Each of them has a specific, function and (subject to what we have to all) each of them gets used up or consumed in the process. We therefore find that all of them would qualify to be considered as "raw materials" for the purpose of N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the cryolite (and other chemicals) as is used up or consumed in the process of manufacture. (This also follows from para 10 in the Appendix to Notification No. 201/79). In actual fact this would make very little difference where the process of manufacture is carried on continuously over a period of weeks or months. Shri Jain himself, while pointing out that this would make only a marginal difference, readily accepted that the exemption would be admissible only on the quantity of chemicals which is actually used up during the process of manufacture. In practical terms, the manufacturer would be able to take credit for the duty already paid on the cryolite at the time he receives it into his factory. However, the quantity of cryolite ly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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