9911796707
TMI Blog1989 (9) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... per and paperboards in which respondents is engaged. The short point for consideration in this appeal is whether the Respondents-Manufacturer, -The Ballarpur Industries Ltd., - was entitled to the benefit of Central Government's Notification No.105/82-C.E., dated 28-2-1982 a question which in turn, depends on whether Sodium Sulphate could be said to have been used as "Raw-Material" in the manufacture of `paper' and `paperboard'. In the proceedings before the authorities, the dispute initially concerned six other inputs. But the controversy before us was limited, as it should rightly be, only to Sodium Sulphate inasmuch as even in the appeal before the Collector (Appeals), the department's grievance, apparently, was confined to the Proforma-Credits of duty earlier paid on Sodium Sulphate [See Col. 6 of the Assistant Collector's Memorandum Appeal dated 15-7-1987 before the Collector (Appeals)]. 2.Respondent is a manufacturer of paper and paperboards in the processes relating to which "Sodium Sulphate" is used in the chemical recovery cycle of Sodium Sulphate which forms an essential constituent of Sulphate cooking liquor used in the digestion operation. The Notification dated 28-2- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a readjudication. The Respondent-Manufacturer challenged this order before the Tribunal. The Tribunal upheld the contention of the Respondent-Manufacturer, set aside the order of the Collector (Appeals) and restored the order of the Assistant Collector. The Tribunal adopted the reasoning in its earlier decision is Seshasayee Paper and Boards Ltd. v. Collector of Central Excise [1985 (22) E.L.T. 153] in which the Tribunal had held : "....the term "raw material" has to be interpreted in the circumstances of each case in the absence of any acceptable or useful definition of the term either in the dictionary or in the technical literature...." "....Sodium Sulphate lye, Sodium sulphate, Daicol (Gaur Gums) and Fluo solid lime used for the bleaching of pulp should be considered as raw materials in the manufacture of paper; they serve a distinct and definitive purpose in the normal and recognised process of manufacture of paper and are essential for the process of manufacture...." In this appeal, the Collector challenges the correctness of the decision of the Tribunal. 2. We have heard Sri A.K. Ganguly, learned Senior Counsel for the Appellant and Sri Soli Sorabjee, learned Senior Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that no satisfactory answer to the question raised in the appeal could be afforded unless a clear line of demarcation between the material merely used in the manufacture of paper on the one hand and material used as "Raw Material" on the other is drawn. Sri Ganguly sought to substantiate this distinction in the present case with reference to certain observations of this Court in Deputy Commissioner of Sales Tax, Board of Revenue v. Thomas Stephen & Co. Ltd. JT 1988 (1) SC 631]. One of the questions there was whether cashew-shells used in the kiln by the dealer who was a manufacturer of tiles, terra-cotta-ware and ceramic-items were exigible to purchase-tax under Section 5A(1)(a) of the Kerala General Sales Tax Act, 1963, on the ground that the dealer had "consumed such goods in the manufacture of other goods..." The Tribunal had held that cashew-shells had been used only as fuel in the kiln for the manufacture of tiles and that, therefore, the condition of 5A(1)(a) of the Act was not satisfied, there having been no consumption of cashew-shells in the manufacture of the ceramic goods. This Court held : "The cashew shells in the instant case, has been used as fuel in the kiln. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on the efficiency of the recovery system, about 40 to 80 kilogrammes of salteake and 25 kilogrammes of limestone are needed per ton of pulp. These chemicals are converted in the chemical recovery and causticizing systems to give sodium hydroxide and sodium sulphide, which are the active chemicals in the pulping liquor". [p. 275] Sri Sorabjee submitted that the Tribunal had consistently taken this view in several cases and that the department not having carried those matters up in appeal must be held to have accepted the correctness of that view. As instances in point, Learned Counsel referred to two decisions, in Collector of Central Excise, Nagpur v. Ballarpur Industries Ltd, Chandrapur [1983 (13) E.L.T. 1263] and in Collector of Central Excise, Bhubaneswar v. Titaghur Paper Mills [1985 (21) E.L.T. 901]. Adverting to appellant's contention that use of Sodium Sulphate was at a stage of preparation of the pulp which is a stage anterior to the actual manufacture of paper, Sri Sorabjee submitted that, apart from the fallacy inherent in the attempt to dissect and otherwise integrated process of manufacture, the definition of `manufacture' in Section 2(f) of the `Act' which takes wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., relied upon by Sri Ganguly, does not really advance the appellant's case. The observations therein to the effect that "consumption must be in the manufacture of raw material or of other component which go into the making of end-product" were made to emphasise the distinction between the "fuel" used for the kiln to impart the heat-treatment to ceramics and what actually went into the manufacture of such ceramics. The observations, correctly apprehended, do not lend themselves to the understanding that for something to qualify itself as "Raw-Material" it must necessarily and in all cases go into, and be found, in the end-product. 7. We also find no substance in the contention of Sri Ganguly that the process in which the Sodium Sulphate was used, was anterior to and at one stage removed from the actual manufacture of paper. Sri Sorabjee's answer to this contention is, in our view, appropriate. That apart the following observations in Collector of Central Excise v. Eastend Paper Industries Ltd. cited by Sri Ganguly himself is a complete answer : "....Where any particular process, this Court further emphasised, is so integrally connected with the ultimate production of goods th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
