Full Judgment
The Assistant Commissioner has denied the benefit of notification and therefore rejected the refund claim. The Commissioner (Appeals) set aside the order of the adjudicating authority held that the benefit of notification was available and therefore sanctioned refund claims.
Hence these appeals by the Revenue.
2. On hearing both sides we find the decision of the larger bench of the Tribunal in the case of Priyesh Chemicals & Metals Vs. Commissioner of Central Excise, 2000 (120) ELT 259 has held that the benefit of exemption under notification 19/88 is not available to imported goods since the condition of the notification, that the product should be manufactured from inputs on which no credit is taken, is not fulfilled.
Therefore the Commissioner (Appeals) finding that the benefit of notification 19/88 is available to the importers, is not correct and requires to be set aside.
3. At this stage learned counsel Shri Balani submits that although this particular plea was not raised at any earlier stage the question of non-excitability of the goods in question can be agitated before us and to support his contention that the items in dispute are not goods on which any Central Excise duty is payable, he cites the decision of the Supreme Court in the case of Union of India Vs. India Aluminium Company 1995 (77) ELT 268 (S.C.) which has been followed by the Tribunal in the case of Hindalco Industries Vs. Collector 1996 (86) ELT 571 and Commissioner of Central Excise, Allahabad Vs. Hindalco Industries 2000 (116) ELT 551.
4. Learned JDR raised an objection on the ground that this plea not having been raised at any earlier stage it is not open to the respondents to raise it at this appellate stage. However, we overrule this objection in the light of the decision of the Tribunal in the case of Sudershan Plywood Industries Vs. Collector of Central Excise 1996 (88) ELT 375. In this case the Tribunal has held that although the issue before the authorities below related to valuation the plea of the appellants that the intermediate products in question were not marketable nor excisable goods can be raised and has decided the issue holding that the intermediate product, namely, urea formaldehyde and phenol formaldehyde resin produced and captively consumed are not excisable goods. In other words although the entire case up to the stage of Tribunal relate to valuation of the goods, the Tribunal allowed the assessee to raise entirely different plea, namely, that the goods were not excisable goods.
5. Since there is no examination of the issue as to whether the items in question are excisable/marketable the issue has to be considered in light of the decisions of the Supreme Court in the case of Union of India Vs. Indian Aluminium Company 1995 (77) ELT 268 (S.C.) and the decisions of the Tribunal in the case of Hindalco Industries. For this purpose while setting aside the impugned order we remand the case to the jurisdiction Assistant Commissioner for fresh decision on the aspect of excitability of the items in question.