I.J. Rao, Member (T)

1. These three appeals raising common question of fact and law were heard together and are being disposed of together. Appeals Nos. 912 913/86 are revenue appeals where M/s Kashmir Vanaspati are the respondents and appeal No. 420/86 is an appeal of M/s Kashmir Vanaspati where C.C.E. Chandigarh is the respondent. The questions involved being similar, appeals are being decided together.

2. The main question to be decided in all these appeals is whether the nickel catalyst, bleaching activated earth and activated carbon (admittedly classifiable under Tariff Item No. 68 GET) used by M/s Kashmir Vanaspati (hereinafter referred to as the appellants) in the course of manufacture of vegetable product are entitled to the benefit of notification No. 201/79-CE (hereinafter referred to as the said Notification) or not. Another question that would arise is whether the demand raised by the Revenue against the appellants was in time.

3. The admitted facts are that nickel catalyst is used as a catalyst in the production of vegetable products. It appears that there cannot ordinarily be production of vegetable product on a commercial scale without the use of catalyst. The said Notification grants exemption to goods falling under item No. 68 GET in the following parts :-

"Set off of duty on all excisable goods on use of duty paid goods falling under item 68 (Tariff items 1 to 68). - In exercise of the powers conferred by Sub-rule (1) of rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 178/ 77-Central Excises, dated the 18th June, 1977, the Central Government hereby exempts all excisable goods (hereinafter referred as "the said goods"), on which the duty of excise is leviable and in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) have been used, as raw materials or component parts (hereinafter referred 'as "the inputs"), from so much of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on the inputs".

Certain conditions are attached and a procedure is prescribed by the Notification. These constitute the remaining part of the notification.

4. The Asstt. Collector held that the nickel catalyst is a cleaning agent used in the manufacturing process of vegetable product and cannot be termed as a raw material, for production of vegetable product in terms of the said Notification. He further held that as the appellants took credit before filing the declaration, the provisions of paras 1 2 of the appendix attached to the said Notification were contravened and that the amount taken as credit should be recovered.

5. These orders were upheld by the Collector, Central Excise (Appeals), except that he held the demand for credit availed of more than six months prior to the date of show cause notice as time-barred.

6. We heard Shri Lachman Dev, for the Appellants and Shri Shishir Kumar, the learned SDR for the Revenue. According to the learned Consultant for the Appellants Shri Lachman Dev, a number of decisions of the CEGAT in similar matters held that for the purpose of the said notification, it is not necessary that the inputs should form part of the final product either exquisitely or implicitly. He cited the following cases in support of his argument :

1. MANU/CE/0070/1987 : 1987(28) ELT 529 (Tribunal) C.C.E. Allahabad v. Hindustan Aluminium Corporation, Mirzapur.

2. MANU/CE/0122/1985 : 1985(21) ELT 901 (Tribunal) C.C.E. Bhubaneshwar v. Titaghur Paper Mills.

3. MANU/CE/0266/1984 : 1985(22) ELT 163 (Tribunal) SRB Seshasayee Paper and Boards Ltd. v. C.C.E.

4. MANU/CC/0038/1985 : 1985(22) ELT 594 (Tribunal) Andhra Sugars Ltd. v. Collector of Central Excise, Guntur.

Sh. Lachman Dev submitted that applying the ratio of the judgments in these matters, the catalyst used by the appellants should be conside