Intermediate-use terminal connectors are not refrigerator parts, preserving small-scale exemption eligibility.

Terminal connectors cleared to customers for use in relays, which were then used in refrigerator manufacture, were too remote to be treated as parts of refrigerators. Their use in an intermediate process did not make the manufacturer a producer of refrigerator parts, so the small-scale exemption under Notification No. 175/86-C.E. remained available.

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Issues: Whether terminal connectors manufactured and cleared to customers, who used them in the manufacture of relays for refrigerators, could be treated as parts of refrigerators so as to deny the benefit of the small-scale exemption under Notification No. 175/86-C.E. dated 1-3-86.

Analysis: The appellants manufactured only terminal connectors and did not directly clear them to refrigerator manufacturers. The customers used those connectors in the manufacture of relays, and the relays were thereafter used in the manufacture of refrigerators. On these facts, the connectors were too remote from the final refrigerator product to be regarded as refrigerator parts. The mere fact that the goods were used in an intermediate process did not make the appellants manufacturers of refrigerator parts.

Conclusion: The connectors were not parts of refrigerators, and the appellants were entitled to the small-scale exemption.

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