Exemption for plaster of paris inputs used in sanitaryware moulds upheld under the amended excise notification.

Plaster of paris used to make moulds for sanitaryware qualified as an exempt input under Notification No. 217/86-C.E., as amended, because the notification covered specified inputs used within the factory in or in relation to manufacture of final products. After amendment by Notification No. 82/87-C.E., plaster of paris fell within the input category and ceramic goods fell within the final product category. The proviso denying exemption applied only where the final product was wholly exempt or chargeable to nil duty, and sanitaryware was not shown to fall within that exception. The exemption was therefore available, and the orders rejecting it were unsustainable.

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Issues: Whether plaster of paris used for making moulds in the manufacture of sanitaryware was entitled to exemption under Notification No. 217/86-C.E., as amended.

Analysis: The exemption applied to specified inputs used within the factory in or in relation to the manufacture of final products. After amendment by Notification No. 82/87-C.E., plaster of paris fell within the category of inputs and ceramic goods fell within the category of final products. The proviso denying exemption applied only where the final product itself was wholly exempt or chargeable to nil rate of duty. Sanitaryware was not shown to be exempt. The later notification also clarified that plaster of paris moulds were inputs for ceramic products.

Conclusion: The exemption was available and the orders denying it were unsustainable.

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