Raw material in paper manufacture is interpreted contextually; essential process chemicals qualified for exemption benefit.

The term "raw material" for exemption purposes requires contextual interpretation based on the facts of each case. Chemicals added to pulp stock or used in the recognised paper-making process, where they serve a distinct and definite function, were treated as raw materials. Alum qualified only to the extent it was used in the pulp stock and not when used merely for water treatment. Sodium sulphide lye, sodium sulphate, Daicol (Gaur gums) and fluo solid lime were regarded as essential inputs in normal paper manufacture, and the stage at which sodium sulphate entered the recovery cycle did not change its character. The specified chemicals were therefore eligible for the notification benefit.

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Issues: Whether alum, sodium sulphide lye, sodium sulphate, Daicol (Gaur gums) and fluo solid lime used in the manufacture of paper were entitled to the benefit of Notification No. 201/79, as amended by Notification No. 105/82, as raw materials.

Analysis: The term "raw material" was held to require contextual interpretation depending on the facts of each case. Chemicals which are added to pulp stock or used in the recognised paper-making process and which serve a distinct and definitive purpose in that process were treated as raw materials. Alum used in the pulp stock was distinguished from alum used only for treatment of water. Sodium sulphide lye, sodium sulphate, Daicol (Gaur gums) and fluo solid lime were found to be essential inputs in the normal manufacture of paper, and the stage at which sodium sulphate was added in the recovery cycle was held not to alter its character as a raw material.

Conclusion: The specified chemicals, including alum to the extent used in the pulp stock, qualified as raw materials and were eligible for the notification benefit.

Final Conclusion: The appeal succeeded and the disputed items were held entitled to the exemption benefit under the relevant notifications.

Ratio Decidendi: A substance used as an essential input in the normal and recognised manufacturing process is a raw material for exemption purposes, even if its point of introduction in the process is dictated by convenience rather than by the immediate stage of conversion.

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