Exemption computation tied to specified input use must be limited to products manufactured with that input, not all quarterly clearances.

Exemption under the notification had to be computed only by reference to vegetable products manufactured using indigenous cotton seed oil and cleared in the relevant quarter. The wording of the notification and the prescribed account form showed that the relevant measure was the percentage by weight of cotton seed oil used in those products, not the total output of all vegetable products and margarine cleared during the quarter. The assessee's broader computation method was therefore correct.

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Issues: Whether, for claiming exemption under the relevant notifications, the percentage of indigenous cotton seed oil had to be computed only with reference to the vegetable products manufactured using that oil, or with reference to all vegetable products and margarine cleared from the factory during the quarter.

Analysis: The notifications made exemption available only in respect of those vegetable products manufactured using indigenous cotton seed oil and cleared in the relevant quarter. The expressions used in the notifications pointed to the vegetable products actually manufactured with cotton seed oil, and the prescribed account form also supported that construction. The extent of exemption depended on the percentage by weight of cotton seed oil used in relation to the total weight of such products, not on the total output of all products manufactured during the quarter, including products in which no cotton seed oil was used.

Conclusion: The computation had to be confined to the vegetable products manufactured using indigenous cotton seed oil, and the assessee's wider method of computation was correct.

Ratio Decidendi: An exemption notification tied to the use of a specified input must be computed only with reference to the goods manufactured with that input and not with reference to unrelated goods cleared during the same period.

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