# M/S.·ASIAN PEROXIDES LTD v. COMMNR. OF· CENTRAL EXCISE, GUNTUR . (Civil Appeal Nos.5842-5843 of 2004)

- **Citation:** [2008] 10 S.C.R. 132
- **Court:** Supreme Court of India
- **Decided:** 2008-07-07
- **Case number:** Civil Appeal Nos.5842-5843 of 2004
- **Bench:** Dr. Arijit Pasayat, P._ Satfiasivam, Aftab Alam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-asian-peroxides-ltd-v-commnr-of-central-excise-guntur-civil-appeal-nos-5842-23446
- **Pages:** 5

## Headnote

. Central Excise Act, 1944:
C
s. 3 - Exemption claimed for finished product manufactured by an Export Oriented Unit wholly from raw materials
produced in India and cf eared to pomestic Tariff Area - Dispute regarding some items used for man(Jfacture of finished
pmduct whether raw materials or consumables -'" Held:
D ·CE STAT has not considered the materials on record in proper
perspective - Matter remitted to it for decision afresh - Notification No.8197-CE dated 1.3.1997 .
. The appellant, as an Ex"port Oriented Unit; claimed
. E exemption- under Notification No.8/97~CE dated 1.3.1997
for Hydrogen Peroxide manufactured and cleared by it .to
tire Domestic Tariff Area. The adjudicating authority declined the benefit as it did not accept the case of the assessee that the finished goods were man_ufactured wholly
from ra"'!.materia!s produced in India. The Commissioner
F (Appea.ls) accepted the claim of the assessee that the ·
items used in manufactui::ing_ the finished products were
not raw materials but o·n1y consumabl.es. However, the
CESTAT allowed the appeals filed by the revenue. Ag".'
grie..ved, the asse$see filed the instant appeals.
·G'
.
. . ,..;
.
c
Disposing of the appeals, the Court
·H
HELD: Since the CESTAT has nofconsidered-the
materials on record in the proper perspective, the im132
I
M/S. ASIAN PEROXIDES LTD. v. COMMNR. OF _ 1-33
CENTRAL EXCISE, GUNTUR [DR. ARIJIT PASAYAT, J.]
pugned judgments are set aside. The matter is. remitted A
to the CESTAT in each case to deal with it afresh in accordance with law. The CESTAT while doing so shaJI keep in
view the decision of this Court in the case of V.anasfhali
Textiles Industries Ltd.* [Para 8] [136-F & G]
*Vanasthali Textiles Industries Ltd. v. Commr. Of C. Ex.,
B
Jaipur, Rajasthan 2007 (218) ELT. 3(SC); relied on.
CCE v. Ballarpur Industries Ltd. (1989) 4 SCC 566 and
Commissioner of Central Excise & Customs, Indore v. Century Denim (2001) 129 ELT 657(T) referred to.
· c

## Text

A
B
[2008] 10 S.C.R.132
-
M/S.·ASIAN PEROXIDES LTD.
v.
COMMNR. OF· CENTRAL EXCISE, GUNTUR
. (Civil Appeal Nos.5842-5843 of 2004)
JULY 7, 2008
[DR. ARIJIT PASAYAT, P._ SATFIASIVAM AND AFTAB
ALAM, JJ.]
. Central Excise Act, 1944:
C
s. 3 - Exemption claimed for finished product manufactured by an Export Oriented Unit wholly from raw materials
produced in India and cf eared to pomestic Tariff Area - Dispute regarding some items used for man(Jfacture of finished
pmduct whether raw materials or consumables -'" Held:
D ·CE STAT has not considered the materials on record in proper
perspective - Matter remitted to it for decision afresh - Notification No.8197-CE dated 1.3.1997 .
. The appellant, as an Ex"port Oriented Unit; claimed
. E exemption- under Notification No.8/97~CE dated 1.3.1997
for Hydrogen Peroxide manufactured and cleared by it .to
tire Domestic Tariff Area. The adjudicating authority declined the benefit as it did not accept the case of the assessee that the finished goods were man_ufactured wholly
from ra"'!.materia!s produced in India. The Commissioner
F (Appea.ls) accepted the claim of the assessee that the ·
items used in manufactui::ing_ the finished products were
not raw materials but o·n1y consumabl.es. However, the
CESTAT allowed the appeals filed by the revenue. Ag".'
grie..ved, the asse$see filed the instant appeals.
·G'
.
. . ,..;
.
c
Disposing of the appeals, the Court
·H
HELD: Since the CESTAT has nofconsidered-the
materials on record in the proper perspective, the im132
I
M/S. ASIAN PEROXIDES LTD. v. COMMNR. OF _ 1-33
CENTRAL EXCISE, GUNTUR [DR. ARIJIT PASAYAT, J.]
pugned judgments are set aside. The matter is. remitted A
to the CESTAT in each case to deal with it afresh in accordance with law. The CESTAT while doing so shaJI keep in
view the decision of this Court in the case of V.anasfhali
Textiles Industries Ltd.* [Para 8] [136-F & G]
*Vanasthali Textiles Industries Ltd. v. Commr. Of C. Ex.,
B
Jaipur, Rajasthan 2007 (218) ELT. 3(SC); relied on.
CCE v. Ballarpur Industries Ltd. (1989) 4 SCC 566 and
Commissioner of Central Excise & Customs, Indore v. Century Denim (2001) 129 ELT 657(T) referred to.
· c
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.·. ·
5842-5843 of 2064
From the final Order. No. 422 and 423/2004 dated .4/ZI
2004 of the Customs, Excise & Service Tax Appellate Tribunal,
0
South Zonal Bench, Bangalore, CircOit Bench at Hyderabad in
Appeal No. E/181-182/2001
WITH
C.A. No. 3644-3645 of 2005
Alok Yadav, Rajesh Kumar and M. P. Devnath for the Appellant.
I. Venkatanarayana, Navin Prakash, Rahul Kaushik and
B.. Krishna Prasad for the Respondent.
·
·
The Ju_~gment of the Court was delivered by·
Dr. ARIJIT PAS~YAT, J. 1. In these appeals challenge is to
E
·l
F
the order by the Customs Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (in short the '1CESTAT').
Before the CESTAT the issue related to the eligibility of the apG
pellantfor the benefit of exemption under Notification No.8/97CE dated -1.3.1997 for Hydrogen Peroxide manufactured and
cleared by the appellant to the Domestic Tariff Area ( in short the
'OTA'). -The Notification .in question .exempts finished products-
, ,
manufactured in a 100%_ Export Oriented Unit (in short_ the 'EOU') , H
134
SUPREME COURT REPORTS
~· -.
[2008] 10 S.C.R.
A
wholly from the raw materials produced or manufactured in India - ~
and allowed to be sold in India from so much of the duty of excise
leviable thereon under Section 3 of the Central Excise Act, 1944
(in short the 'Act') as is in excess of amount equal to the duty of
. excise leviable under Section 3 of the Act on like goods proB . duced or manufactured in India other than in a 100% EOU.
c
2. The original authority did not accept the stand of the
_appellant that the finished goods namely Hydrogen Peroxide
. removed .by them from their EOU to the OTA was manufactured
wholly from the raw materials produced in India.
3. Aggrieved by the adjudication, assessee appellant filed
an appea! before the Commissioner of (Appeals) Excise who
accepted the contention of the appellant that the above mentioned items are not raw materials but only consumable and,
therefore, assessee cannot be denied the benefit of exemption
-D under Notification no.8/97 in respect of several raw materials
(11 in number). The revenue preferred appeals before the
CESTAT. - By the impugned order in each case CESTAT accepted the s!and of the revenue. It was held that the respondent
was not entitled to the benefit of Notificati911No, 8/97.
E
4. It heJd that in Commissioner of Central Excise & Customs, Indore v. Century Denim (2001) 129 EL T 657 (T) the Tribunal applied the tests enunciated by this Court namely, whether
it is an ingredient which goes into the making of the end product
in the sense that without_ its presence the end product, as such is
- · F -· renderea impossible and took the view that indigo _pure dye,·-lycra
·and other important fixing agents utilized in __ the manufacture of
denim fabrics are_ raw materials and not consumables.
μ _s. A~cording' to the learned c;ounselfor the appellant the
materials in question are not raw materials b~t consumable as
G per definition in para 3.13 of the EXIM Policy. According to the
definition of 'consumable' it means anYitem which participates
'in or is required for manufacturing process but does noHorm
part of the end"product. items which are substantially or totally
- consumed during manufacturing _process will be deemed to be
· 'H -consqmable:. According to para 3.41 of the policy, raw n:aterial
J
-
..
,.
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