Feed-stock classification for furnace oil used in fertilizer plant commissioning confirmed under the applicable exemption notification.

Furnace oil received under Chapter X procedure and used during test-run and commissioning of a fertilizer plant before commercial production commenced was treated as feed-stock, not merely fuel, because it was used in the gasification, desulphurisation and decarbonation stages integral to the manufacturing process. On that construction, the oil satisfied Notification No. 147/74-C.E. as raw material for fertilizer manufacture. Notification No. 195/76-C.E. was inapplicable because it covered furnace oil intended for use otherwise than as feed-stock in fertilizer production, so the demand based on that notification could not stand.

---

---

Issues: Whether furnace oil received under Chapter X procedure and used during the test-run and commissioning stage of a fertilizer plant, before commercial production commenced, was used as feed-stock in the manufacture of fertilizers so as to fall within Notification No. 147/74-C.E., and whether Notification No. 195/76-C.E. could apply instead.

Analysis: The expression "feed-stock" was construed as raw material supplied to a machine or process. The furnace oil was not used as fuel but was used in the gasification, desulphurisation and decarbonation sections during trial runs and stabilisation of the plant. Such trial runs were treated as an essential part of the manufacturing process, and the intended use of the oil was found to be as raw material for fertilizer production. On that basis, the requirements of Notification No. 147/74-C.E. were held to be satisfied. Notification No. 195/76-C.E. was held inapplicable because it governed furnace oil intended for use otherwise than as feed-stock in the manufacture of fertilizers.

Conclusion: The furnace oil qualified as feed-stock in the manufacture of fertilizers under Notification No. 147/74-C.E., and the demand based on Notification No. 195/76-C.E. was unsustainable.

---