Captive consumption exemption for recycled biscuit waste applied where records and statements showed reuse in fresh biscuit manufacture.

Broken biscuits reused in the manufacture of fresh biscuits were treated as captively consumed goods and, on that basis, fell within the captive consumption exemption under Notification No. 67/95. The factual finding rested on the Director's statement and maintained records showing reuse from 1 April 1996 onwards. The objection that records were not properly maintained was regarded as merely technical and insufficient to displace the factual conclusion. No substantial question of law was found to arise on the record.

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Issues: Whether broken biscuits recycled and consumed in the manufacture of fresh biscuits were not dutiable by reason of captive consumption and the benefit of the exemption notification.

Analysis: The finding recorded below, based on the statement of the Director and the maintained records, was that the broken biscuits were in fact reused in the manufacture of fresh biscuits from 1/4/1996 onwards. On those facts, the product was treated as captively consumed and covered by the exemption for captive consumption under Notification No. 67/95. The objection that the records were not properly maintained was held to be only technical and did not displace the factual finding. No substantial question of law arose from the record.

Conclusion: The issue was answered in favour of the assessee, and the exemption for captive consumption applied.

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