Consumables versus raw materials test governs epoxy resin treatment in polished granite slab manufacture.

Imported epoxy resin and hardener used in polishing granite slabs were treated as consumables, not raw materials, because the governing test asks whether an input is indispensable to the manufacture itself and whether the final product can emerge without it. Here, the resin only filled surface cracks and improved gloss and smoothness; the granite slabs were otherwise complete and usable without it. On that basis, the article notes that similar resins and fillers are treated as consumables, so the input does not disqualify concessional Domestic Tariff Area clearances under Notification No. 23/2003-CE.

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Issues: Whether imported epoxy resin and hardener used in polishing granite slabs by a 100% Export Oriented Unit were to be treated as raw materials so as to deny the benefit of Notification No. 23/2003-CE for Domestic Tariff Area clearances.

Analysis: The governing test for determining whether an input is a raw material is whether it is so essential to the manufacturing process that the end product cannot emerge without its presence, and whether it is used in the manufacture itself rather than as part of the manufacturing apparatus. Applying that test, the imported epoxy resin was found to serve only to fill surface cracks and improve gloss and smoothness. The granite slabs were otherwise complete and usable even without the resin, and the material did not constitute an ingredient indispensable to the emergence of the finished product. The reasoning was supported by the cited precedents treating similar resins and fillers as consumables, not raw materials, in the manufacture of polished granite slabs.

Conclusion: The imported epoxy resin and hardener were consumables and not raw materials. The assessee remained eligible for the concessional benefit under Notification No. 23/2003-CE, and the Department's demands were unsustainable.

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