Temporary out-of-State manufacture step does not defeat in-State use condition for exemption relief.

Temporary dispatch of goods outside Rajasthan for an incidental and unavoidable stage of manufacture, followed by their return for completion and ultimate use within the State, does not defeat a notification condition requiring use within the State. The reasoning treats the out-of-State movement as part of an intermediate manufacturing process rather than a diversion of the goods from the exempt purpose. On that basis, the exemption remained available and the departmental challenge failed.

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Issues: Whether the dealer satisfied the condition under the exemption notification that the goods should be used within the State, when a limited part of the manufacturing process, namely die-casting, was carried out outside Rajasthan and the goods were then brought back for completion of manufacture within the State.

Analysis: The exemption was denied by the assessing authority on the ground that the statutory condition of use within the State was not met. The Board of Revenue took the view that the limited out-of-State movement was only for an incidental stage in the manufacture of ornaments, because the necessary facility was unavailable within Rajasthan, and the goods were returned for ultimate use in the State. The decisive consideration was that the goods were sent only for completing an intermediate manufacturing step and were ultimately used within Rajasthan; such a temporary removal did not negate satisfaction of the notification condition.

Conclusion: The condition of use within the State was satisfied. The assessee was entitled to the exemption, and the revision failed.

Final Conclusion: The departmental challenge to the exemption was rejected, and the Board of Revenue's view granting relief to the dealer stood confirmed.

Ratio Decidendi: Temporary dispatch of goods outside the State for an incidental and unavoidable stage of manufacture, followed by their return for ultimate use within the State, does not defeat a notification condition requiring use within the State.

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