Necessary chemical test applied to barium carbonate used in caustic soda manufacture, qualifying it for exemption benefit.

Barium carbonate used in the electrolytic manufacture of caustic soda was treated as a necessary chemical for the commercial production process and therefore qualified for Notification No. 201/79. The text applies the test whether the material is an integral aid in manufacture, noting that sodium chloride and brine contain calcium and magnesium impurities that must be removed for commercially acceptable caustic soda. Because barium carbonate precipitates and removes those impurities, it was regarded as essential to the process and entitled to the exemption benefit.

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Issues: Whether barium carbonate used in the preparation of caustic soda by the electrolytic process was entitled to the benefit of Notification No. 201/79 dated 2-6-1979.

Analysis: The relevant test was whether the material was a necessary chemical in the commercial manufacture of caustic soda. The record showed that commercial sodium chloride and brine normally contain calcium and magnesium impurities, while caustic soda must be free from those impurities. Their removal was therefore necessary for producing commercially acceptable caustic soda. Barium carbonate was used to precipitate and remove those impurities, making it an essential chemical in the well-known electrolytic process of manufacture.

Conclusion: Barium carbonate qualified for the benefit of Notification No. 201/79 when used in the preparation of caustic soda by the electrolytic process, and the appeal was allowed in favour of the assessee.

Final Conclusion: The exclusion of the material from the notification benefit was set aside, and the assessee was held entitled to the claimed relief.

Ratio Decidendi: A chemical used as a necessary and integral aid in the commercial manufacture of the final product, by removing unavoidable impurities in the raw material, is entitled to the benefit of the exemption notification applicable to that manufacture.

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