Broad input treatment under excise set-off notification allowed duty relief for tyre-manufacturing materials used in production.

Air-bags, curing bags and bladders used in tyre manufacture were treated as inputs for set-off under the applicable excise notification because they were used in the course of manufacture, even though they did not directly become part of the finished tyres or tubes. The term input was read broadly to cover articles used in relation to manufacture, not merely materials consumed once or incorporated into the final product. On that basis, the items were not treated as excluded appliances or equipment, and the claim to duty set-off was upheld.

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Issues: Whether air-bags, curing bags and bladders used in tyre manufacture were eligible for set-off of duty as inputs under Notification No. 95/79-C.E. as amended by Notification No. 58/82.

Analysis: The goods in question were shown, on the manufacturing process and flow chart, to be used in the course of manufacture of tyres and tubes. The notification granted set-off where the specified inputs were used in the manufacture of the final products, and the term input was to be understood in a wide sense. It was not necessary that the input should go directly into the final product or be consumed only once, so long as it was used in relation to manufacture. Following earlier Tribunal decisions, air-bags and bladders were treated as inputs and not as appliances or equipment excluded from the notification.

Conclusion: The claim to set-off of duty was upheld and the appeal succeeded.

Ratio Decidendi: For purposes of a set-off notification, an article used in relation to manufacture qualifies as an input even if it does not directly become part of the final product.

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