Indirect use of fuels in captive steam and power generation qualifies as use in fertilizer manufacture for exemption.

Fuels used to generate steam and electricity for captive consumption in fertilizer production were treated as goods used in the manufacture of fertilizers for exemption purposes. Indirect use through steam or electricity that is actually consumed in the manufacturing process was held to satisfy the notification requirement, even though the fuels were not themselves the final feedstock. The matter was regarded as covered by prior decisions on the same notification, and the exemption was therefore available on that basis.

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Issues: Whether fuels used for generation of steam and electricity, which are in turn used within the factory for manufacturing fertilizers, qualify as use "in the manufacture of fertilizers" for the purpose of exemption under the relevant notifications.

Analysis: The exemption applied to fuels intended for use otherwise than as feedstock in the manufacture of fertilizers. The fuels in question were used as fuel, a part of which generated steam and electricity for captive consumption in the fertilizer manufacturing process. The settled position in the appellants' own earlier cases was that indirect use through generation of electricity, where the electricity is consumed in manufacture, amounts to use in the manufacture of fertilizers. The issue was therefore treated as no longer open and covered by the prior orders, including the order dealing with the same notification.

Conclusion: Indirect use of the fuels for generation of electricity consumed in the factory amounts to use in the manufacture of fertilizers, and the exemption is admissible.

Ratio Decidendi: For exemption notifications covering goods used in the manufacture of fertilizers, indirect use of those goods for generating electricity or steam that is consumed in the manufacturing process qualifies as use in the manufacture.

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