Incidental by-products in manufacturing qualify as manufactured goods for incentive benefits absent express exclusion.

A by-product or scrap arising incidentally in the same manufacturing process as the principal product is treated as goods manufactured by the dealer for eligibility under the Rajasthan Sales Tax Incentive Scheme, 1987. The Scheme, read with section 4(2) of the Rajasthan Sales Tax Act, 1954 and its definition framework, does not justify different treatment of such incidental by-products unless there is an express exclusion in the Scheme or the Act. The stated legal position is that manufacturing does not end with the principal product alone; incidental scrap remains part of the manufacturing result and qualifies for incentive benefits.

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Issues: Whether scrap or other by-product obtained incidentally in the course of manufacture of the principal product is "goods manufactured by the dealer" for the purpose of the Rajasthan Sales Tax Incentive Scheme, 1987.

Analysis: The Incentive Scheme operated under section 4(2) of the Rajasthan Sales Tax Act, 1954 and the expression used in the Scheme had to be read in light of the parent Act and its definition provisions. The manufacturing activity of a dealer does not end only with the principal product; where a by-product or scrap emerges as an incidental adjunct of the same process, it is also the result of manufacture. In the absence of any express exclusion in the Scheme or the Act, such by-product cannot be treated differently from other manufactured goods for the purpose of eligibility to incentive benefits.

Conclusion: The by-product/scrap obtained from the manufacturing activity was goods manufactured by the dealer and was eligible for the benefit under the Incentive Scheme.

Final Conclusion: The assessee's revision succeeded and the denial of incentive benefit on the sale of by-product was set aside.

Ratio Decidendi: A by-product incidentally obtained in the course of manufacture is part of the manufacturing process and, unless expressly excluded, qualifies as goods manufactured by the dealer for incentive benefits under the governing scheme.

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