Product-based electric furnace concession applies to steel wire drawn from duty-paid rods; further differential duty is not payable.

Duty concession under the electric furnace exemption notifications was treated as product-based rather than factory-based. The stated principle is that, where specified goods are manufactured with the aid of an electric furnace and from prescribed inputs, the benefit attaches to the goods themselves and is not lost because a later processing stage is carried out separately. On that reasoning, steel wire drawn from duty-paid steel wire rods that had already satisfied the notification conditions remained eligible for the same concession, and no further differential duty was payable under the set-off arrangement.

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Issues: Whether steel wire drawn from duty-paid steel wire rods was entitled to the electric furnace concession under the relevant exemption notifications, and whether any further differential duty was payable.

Analysis: The concession under the notifications was held to attach to the product, not to the particular manufacturer or the factory in which every processing stage took place. The proviso required that the specified products be manufactured with the aid of an electric furnace and out of prescribed scrap or related inputs. Since the wire rods from which the wire was drawn had already satisfied those conditions and had enjoyed the concession, the same benefit could not be denied merely because the wire-drawing stage was carried out separately. The effective duty on the wire was therefore the same as the duty already paid on the rods, and no further duty could be demanded under the set-off arrangement.

Conclusion: The wire was held eligible for the electric furnace concession and the demand for differential duty was unsustainable.

Ratio Decidendi: Where an exemption proviso grants concessional duty to specified products manufactured with the aid of an electric furnace and from prescribed inputs, the concession is product-based and does not depend on the manufacturer possessing the furnace or on all processing being done in the same factory.

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