TMI Blog1988 (3) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... he point at issue in this matter is fully covered in favour of the appellant by the decision of the Supreme Court in the case of Aluminium Corporation of India Limited v. Union of India Others, 1978 E.L.T. (J 452) and Union of India Others v. Tata Iron Steel Co. Ltd., Jamshedpur, 1977 E.L.T. (J 61). It is also submitted that the decision of the Madras High Court in the case of Indian Organic Chemicals Ltd. v. Union of India and Others, 1983 E.L.T. 34 is also in accordance with the views of the Supreme Court in the two cases. 4. Shri K.C. Sachar, J.D.R. for the respondent briefly submits that he would like to reiterate the stand taken by the department before the lower authorities. He submits that the raw material in this case comprises a nominal amount of 4% waste and 96% of it is made up of virgin chips. It is submitted that fibre made out of such a blend cannot be considered a manufacture out of waste. The learned Departmental Representative adds that the decision of the Madras High Court in the case of Indian Organic Chemicals Ltd. (supra) cannot support the appellant s claim in the present matter. In that case, the party had sought the benefit of Notification No. 37/78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed for making fresh items like sheets, there was to be a reduction in the rate of duty leviable on the final product. As a result, a manufacturer who had paid Rs. 300/- for the items at the intermediate stage of manufacture would, on use of such items in the later stage of manufacturing finished goods, get concession to that extent by being charged only Rs. 200/- per metric tonne. The department had taken the view that the concessional rate of Rs. 200/- per metric tonne was applicable only to those aluminium manufactures which were made out of duty-paid aluminium in any crude form and that this would not cover aluminium manufactures made partly out of duty-paid and partly out of non-duty paid crude. On this, the Supreme Court observed as follows :- We wonder where the author of this order discovers in the statutory notification the exclusion from exemption altogether of manufactures partly out of duty-paid crude and partly oJt of non-duty paid crude. If 99% of duty-paid crude was used for manufacture of sheets etc., should the final product be exigible to tax at Rs. 500/- per metric tonne? Would it not virtually mean that merely because a wee bit of non-duty paid crude was mixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atute is compellingly certain to that effect. 7. The Madras High Court in the case of India Organic Chemicals Ltd. v. Union of India and Others (supra) paid homage to the same principle when it held that in interpreting notifications of this nature, the expression manufactured out of does not mean that the end product should exclusively be produced out of the material specified. Therefore, the benefit of an exemption cannot be denied to a manufacturer who has used some other material in the process of such product. 8. We agree with the submissions made by the learned J.D.R. that the facts in all the three foregoing cases cited by the appellants in their favour can be differentiated from the facts in the present case. It is true that in the case of Indian Organic Chemicals Ltd. v. Union of India and Others (supra), the High Court was impressed by the fact that MEG (Glycol) which had been used in the manufacture of the final product was in fact only an assisting agent which, at the end of the process of manufacture, got almost entirely recovered. Therefore, it had appeared that the final product could be considered to be a manufacture in which MEG had not been used at all. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was out of the said mix. The claim for the appellants is that benefit was being claimed only with reference to that part of the fibre which could be said to have been manufactured out of the waste. It was submitted that the relief could be granted either with reference to the 4% of the final product being allowed to be removed at the concessional rate or, in the alternative, the entire product could be subjected to 96% of the normal rate. When asked by one of us as to how this rate of 96% of the normal rate could be pressed into service since no such rate is mentioned even in the notification the learned counsel submitted that if the principle pleaded for the appellants is accepted it would be open to the department to grant relief in either of the two manners suggested by him. It would appear to me that relief claimed in the alternative as mentioned above (by subjecting the entire product to 96% of the normal rate) would not be permissible as that would introduce a rate not contemplated even under the notification. 13. But on the issue whether the benefit should be denied merely because chips had also been included along with the waste the learned counsel had relied on the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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