1996 (4) TMI 281

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..... n Caustic Soda and Hydrochloric Acid claimed by them to be inputs in relation to the manufacture of their final product, Carbon Black. 2. Shri S. Madhavan, learned Chartered Accountant appeared for the appellants. He submitted that the inputs in question are used by them in their demineralisation plant where water is purified and boiled to produce steam. The lower authorities have erroneously concluded that such use of the inputs in question is not in or in relation to the manufacture of Carbon Black, their final product but only in the maintenance of plant and machinery. He referred to the Tribunal decisions in the case of Straw Products Limited v. Collector of Central Excise [1992 (59) E.L.T. 572], Indian Explosives Limited v. Collector .....

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..... t. What stand so excluded from the scope of the expression inputs are items, like machines, machinery equipment etc. and not items used in the maintenance of plant and machinery. During the arguments, Shri Madhavan specifically contested the observation in the order that caustic soda and hydrochloric acid are admittedly used for maintenance of plant and machinery. He contended that there was no such admission on their part. The purpose of using the disputed item in their demineralisation plant is to obtain demineralised water which is used to produce steam. Some quantity of steam is directly used as input in the manufacture of the final product by reacting with the feed stock. As regards the finding that these inputs are not directly cons .....

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..... is set at rest by use of the words used in relation to the manufacture . 6. The scope of the more restricted expression use in the manufacture of itself came up for decision in the case of J.K. Cotton Spinning Weaving Co. Mills Ltd. v. S.T.O. - 1965 (16) STC 563. It was held therein that the expression in the manufacture of goods should normally encompass the entire process of converting raw materials into finished goods. It was further held that where any particular process is so integrally connected with the ultimate production of goods that but for that process manufacture or processing of goods would be commercially inexpedient, goods required in that process would fall within the expression in the manufacture of goods. Applying .....

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