C.T.A. Pillai, Member (T)

1. As the two appeals arise from out of a single order No. 39/82 dated 30-11-82 of the Assistant Collector of Central Excise, Rajahmundry and involve similar issues they are being disposed of by this common order.

2. By order dated 30-11-82 the Asst. Collector of Central Excise, Rajahmundry disallowed a claim of the appellants for grant of benefit of Notification No. 201/79 dated 4-6-1979 in respect of the following items :-

(i) Alumina Ferric;

(ii) Sodium Sulphate;

(iii) China Clay;

(iv) Glue powder;

(v) Soap stone powder;

(vi) Rosin;

(vii) Acetic Acid;

(viii) Sulphuric acid powder (clarified as sulphamic acid powder); and

(ix) Alfoc powder,

on a finding that a raw material claimed to be used in the manufacture it should be found in the analysis of the final finished product. He, however, allowed the claim in respect of burnt lime. The appellants went in appeal to the Collector of Central Excise (Appeals), Madras against the refusal to grant the benefit in respect of all the items other than the Burnt Lime. That authority observed that though the nine items are no doubt used in the manufacture of paper, they do not constitute raw material of paper, as paper cannot be produced or made out of such material through any process of manufacture. They are only chemicals. He thus upheld the decision of the Asst. Collector. In respect of burnt lime the Department went in appeal to the Collector of Central Excise (Appeals) pursuant to an order under Section 35E(2) of the Act issued by the Collector of Central Excise, Guntur. Here too the Collector (Appeals) reversed the decision of the Assistant Collector on a finding that paper cannot be manufactured by subjecting burnt lime to any process; hence it was not entitled to the benefit of the notification. The appellants are before us against these two orders of the Collector (Appeals) referred to above.

3. In so far as Alfoc powder is concerned the representative of the appellants dropped the claim. In respect of Sodium sulphate, Alumina ferric, Rosin, Acetic acid and Sulphamic acid powder, he relied on the decision of this Bench of the Tribunal in the case of 'Rayalaseema Paper Mills v. Collector of Central Excise, Hyderabad-ED (MAS) No. 399/83 and 157/84 dated 15-2-85-wherein the Tribunal has accepted that these are raw materials used in the manufacture of paper for purposes of Notification No. 201/79. In respect of China clay, glue powder and Soap stone powder which are claimed as used as sizing material in the manufacture of paper and hence would be entitled to be treated as raw material. Adverting to burnt lime he referred to the case of Seshasayee Paper and Boards Ltd. v. Collector of Central Excise, Coimbatore- ED(MAS) 58/84 dated 16-11-1984-MANU/CE/0266/1984 : 1985 (22) E.L.T. 163-dealt with by this Bench of the Tribunal in which Fluo solid lime has been given the benefit of the notification. The representative explained that fluo-solid lime is the same as burnt lime. It is used in a manner similar to the use of sodium sulphate and it should also be given the benefit of notification. In this connection, he referred to the observations of the Tribunal in the case of Kerala Electric Lamp Works v. Collector of Central Excise, Cochin-ED(MA$) No. 281/83 dated 21-1-1985-in which this Bench had observed :-

"5. This Bench had occasion to examine the scope of the term 'raw material' occurring in Notification No. 201/79. It has consistently held that it is not necessary for a raw material to be present in the finished product to entitle it to the concession under the notification. The entitlement will depend upon the process involved; the manner of usage of the material, essentiality recognition of the products in the process of manufacture and the like."

He claimed that burnt lime satisfies the criterion followed by the Bench in this case. He also referred to the decision of the 'C' Bench of this Tribunal in the case of Collector of Central Excise, Bhubaneshwar v. Titaghur