Concessional duty under exemption notifications depends on reliable segregation of indigenous inputs and the ordinary commercial meaning of raw material.

Exemption notifications requiring goods to be manufactured wholly out of raw material produced or manufactured in India were applied on the basis of reliable segregation of indigenous and imported inputs. Where the assessee maintained separate records, paid normal duty on products made from imported material, and claimed concessional duty only for products made from indigenous material, the benefit could not be denied without contrary evidence of manipulation. The expression "raw material" was treated in its ordinary commercial sense, and the concessional exemption was sustained for the goods manufactured from Indian inputs.

---

---

Issues: (i) Whether waste steam and low boiling component were eligible for concessional rate of duty under the exemption notifications when the products were claimed to have been manufactured wholly out of raw material produced or manufactured in India.

Analysis: The condition in the notifications was that the goods must be manufactured wholly out of raw material produced or manufactured in India. The factual finding accepted by the first appellate authority was that the assessee maintained separate records for indigenous and imported orthoxylene, paid normal duty on products manufactured from imported material, and claimed concessional duty only for products manufactured from indigenous material. No material was shown to establish that those records were manipulated. The issue had also been decided earlier in the assessee's own case, and the same view had been affirmed by the Supreme Court on the approach to the expression 'raw material'.

Conclusion: The goods were eligible for the concessional benefit, and the Revenue's challenge failed.

Final Conclusion: The appeal did not survive in view of the earlier binding decision on the same issue in the assessee's own case, and the order allowing the exemption was sustained.

Ratio Decidendi: Where the exemption condition is satisfied on the basis of reliable segregation and records showing indigenous and imported inputs, the benefit cannot be denied merely by disputing the records without contrary evidence; the expression 'raw material' is to be understood in its ordinary commercial sense.

---