Per Jyoti Balasundaram : The appellants were an EOU manufacturing cotton fabrics. They were permitted to clear certain quantities of fabrics into domestic tariff area on payment of applicable duties of excise. Such clearance was made at the concessional rate of duty specified in Notification No. 8/97. This notification limits the benefit to goods manufactured using raw material produced or manufactured in India. The assessees in the manufacture of such fabrics had used both indigenous and imported inputs. Show cause notices were therefore issued proposing computation of duty in terms of Notification No. 2/95 and seeking recovery of the duty short paid and also alleging liability to penalty.

2. Before the Commissioner the assessee claimed that the imported materials were not raw material but were consumables and in an earlier case noticing the consumption facts benefits of Notification No. 8/97 had been granted. The CBEC had also permitted grant of benefit of this notification where imported consumables were used. It was claimed that the goods did not attract additional excise duty under the Special Importance Goods Act in terms of Notification No. 58/95-CE dated 25.7.1995.

3. In