- (1.) HEARD learned Counsel for the parties. These appeals have been filed against the Judgment passed by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) dated 24th August, 1999.
(2.) BRIEFLY stated facts are as follows: Respondent Nos. 3 and 5 are manufacturer of Ethambutol Hydrochloride I.P. For manufacture of this product they import two items (i) DL -2 Aminobutanol and (ii) Tartaric Acid. In the process of manufacture two intermediate products namely DL -2 Aminobutanol and L -2 ABT come into existence. For our purpose we are only concerned with L -2 ABT. These two companies give L -2 ABT to the 1st respondent. It is claimed that 1st respondent merely recovers Tartaric Acid, contained in L -2 ABT, and returns the Tartaric Acid to Respondents 3 and 5. Appellant claimed that Tartaric Acid was being manufactured by the 1st respondent. They claim that it is a new and distinct product from L -2 ABT. Appellant, therefore, sought to levy duty on the manufacture of Tartaric Acid. The Commissioner held, on the basis of various affidavits filed by persons in the trade and experts in the field, that there was no manufacture but only recovery of Tartaric Acid. The Commissioner also held that claim was time barred as the extended period under Section 11A was not available. The appeal has been dismissed by the impugned order only on the ground that there was no manufacture. It is held that the process merely involves recovery of Tartaric Acid.
(3.) FROM the various affidavits, which are on record, it appears that during manufacture of Ethambutol Hydrochloride I.P. the two substances DL -2 Aminobutanol and Tartaric Acid have to be mixed together. As stated above two intermediate products came into existence one of which is L -2 ABT. As per the affidavits, in layman's language, L -2 ABT is nothing else but contaminated Tartaric Acid. As per the affidavits it is unusable without a process of recovery. Thus, as per the affidavits, there is only recovery of the Tartaric Acid which was the original imported product. If this be the position then Tartaric Acid is merely being recovered for further use and there is no manufacture. But if L -2 ABT is in the hands of a person who had not imported Tartaric Acid and that person, by a process gets Tartaric Acid which is then sold in the market then there would be manufacture and duty, would have to be paid.;