Consumables in granite polishing qualify for exemption when they do not remain in the finished product and are used only in manufacture.

Epoxy resin and ager used in polishing granite slabs were treated as consumables, not ineligible raw materials, because they were applied only during manufacture for polishing and filling fissures or minute pores and did not remain in the finished slabs. Applying earlier Tribunal decisions, the operative test was whether the article goes into the end-product in a manner that its absence would make the product impossible; items used merely in the manufacturing process fall outside raw material treatment. Board circulars and communications from Development Commissioners also supported this classification. On that basis, exemption under Notification No. 8/97-C.E. could not be denied, and the assessee's entitlement was upheld.

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Issues: Whether epoxy resin and ager used in the manufacture of polished granite slabs were consumables entitled to the benefit of Notification No. 8/97-C.E. dated 1-3-1997, and whether the Revenue could deny the exemption on the footing that they were ineligible raw materials.

Analysis: The issue was already covered by earlier decisions of the Tribunal, which applied the test that a raw material must go into the making of the end-product in such a manner that its absence would make the product impossible, and that articles used only during the manufacturing process, without remaining in the finished product, are consumables. The record showed that epoxy resin and ager were applied only for polishing or filling fissures and minute pores, and did not remain with the polished granite slabs. The Board circulars and communications from the Development Commissioners treating these items as consumables also supported the assessee's case.

Conclusion: The exemption under Notification No. 8/97-C.E. could not be denied. The Revenue's appeals were rejected and the assessee's entitlement to the benefit was upheld.

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