COMMISSIONER OF C. EX. Vs. SUNSHINE JEWELLERS LTD.

JUDGEMENT

(1.) HEARD both sides. Revenue filed the appeal against Order -in -Appeal passed by the Commissioner (Appeals) whereby a demand for the period April, 1999 to 28 -2 -2001 is dropped in view of Notification No. (NT.), dated 31 -12 -2003 issued under Section 11C of the Central Excise Act, 1944.

(2.) BRIEF facts of the case are that respondents are engaged in the manufacture of gold electroplated/electroformed jewellery. For the manufacture of jewellery the respondents are also manufacturing Gold Potassium Cyanide (GPC). The jewellery in electroplated/electroform is exempted from payment of duty during the period in dispute. A Show Cause Notice was issued to the respondents demanding duty in respect of GPC on the ground that the same is intermediate product for the manufacture of exempted jewellery. Therefore the respondents are liable to pay duty on GPC. The adjudicating authority after taking into consideration Notification No. (N.T.) held that GPC is emerging in the course of manufacture of jewellery and the same has been exempted from Central Excise duty vide Notification No. (N.T.), and dropped the demand up to the period 28 -2 -2001. Revenue filed this appeal on the ground that Notification No. 84/2003 exempts goods falling under Chapter 28 of the Tariff arising during the course of manufacture of imitation jewellery falling under Chapter 71 of the Tariff.

(3.) THE contention is that GPC is separately manufactured by the respondents and is further used in the manufacture of imitation jewellery. Therefore, it cannot be said that GPC is arising during the course of manufacture of imitation jewellery.