V.P. Gulati, Member (T)

1. This is an appeal against the order of the Collector Central Excise (Appeals), Madras. The point that falls for consideration is whether Barium Carbonate which is used in the process of manufacture of caustic soda is eligible for the benefit of Notification 201/79 as amended by the 105/82-CE dated 28-2-1982. In terms of this Notification, all excisable goods in the manufacture of which goods falling under Item 68 of the GET have been used as raw-materials or component parts are exempted from payment of duty to the extent of the duty paid on the raw-material and components subject to the other provisions of the notification. The barium carbonate in the instant case is stated to be for purification of the brine solution and which after purification is electrolyzed resulting in the production of the caustic soda. The issue before the lower authorities was whether barium carbonate can be said to have been used for the manufacture of caustic soda as raw-material. The Collector (Appeals) concurred with the adjudicating authority and held that the said use of barium carbonate cannot be considered as a raw-material.

2. The learned Consultant for the appellants pleaded that the purification of the barium solution is an essential process for the manufacture of caustic soda. In support of this plea, he drew our attention to the publication titled 'Minimal National Standards Caustic Soda (Mercury Cell) Industry' published by Central Board for the Prevention Control of Water Pollution, 6th Floor, Skylark, 60 Nehru Place, New Delhi -110 019. He pleaded that the Tribunal in the case of CCE v. Titaghur Paper Mills MANU/CE/0122/1985 : 1985 (21) E.L.T. 901 (Tri) have held that for an input to be considered as the raw-material it should be such as that is used in the process of manufacture of the excisable goods in respect of which the benefit of notification is claimed.

3. The item under consideration in that case was alum which was used for the treatment of water and he drew our attention to the findings in para 7 in this regard which are reproduced for convenience of reference:

"With respect to alum, a part of it is used to treat water used in the manufacture of paper. This alum, therefore, is an input and a raw-material because it directly helps in the manufacture of paper. The Assistant Collector was wrong to deny this alum the benefit of Notification No. 201/79-C. E. However, he is correct in respect of the alum used in the clariflocculator which neutralizes and treats the effluent before it is discharged outside the factory precincts. This water does not go into the paper manufacture, though possible It might do so at a future date; but that is too long a shot for us to work upon. We can see, for our immediate concern, that the water does not go into the manufacture of paper but into the river or lake."

4. He also drew our attention to the findings of the Tribunal in the case of Collector of Central Excise, Allahabad v. Hindustan Aluminium Corporation, Mirzapur MANU/CE/0070/1987 : 1987 (28) E.L.T. 529, para 4 and which is reproduced for convenience of reference:

"While the logic of the Assistant Collector are admirable, the result of his syllogism will upset the pattern that is clearly not the desire of the law makers. The only meaningful interpretation we can see is to say that substances, articles, Items, that are used and consumed in the process of production as part of the system of manufacture should qualify as raw materials under notification No. 201/79-CE. The Assistant Collector himself correctly and fairly admitted that cryolite, aluminium fluoride, borax, lime are used in the manufacture of aluminium. To use his own words: "in this case there is no doubt that borax, lime, aluminum fluoride and cryolite are used in the manufacture of aluminium as process of manufacture of aluminium is not commercially viable without the use of these materials but this only is not sufficient to allow the party to avail