Mine-site mixing of explosive ingredients preserved exemption; classification note could not deem factory manufacture.

Notification No. 63/95-C.E. remained available where explosives were transported in separate ingredients and mixed only at the mine site in a mobile van. The bulk explosive came into existence only after mixing at the mines, so manufacture occurred at the mine site and not in the factory. Note 2 to Section VI of the Central Excise Tariff is only a classification provision for goods put up in separate constituents intended to be mixed, and it does not by itself deem factory manufacture. In the absence of a specific deeming fiction, the exemption could not be denied merely because the ingredients were carried separately.

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Issues: Whether the benefit of Notification No. 63/95-C.E. was available to explosives blended at the mine site from separately transported ingredients, and whether Note 2 to Section VI of the Schedule to the Central Excise Tariff denied the exemption on the footing that manufacture had taken place in the factory.

Analysis: The goods were transported separately to the mine site and mixed there in a mobile van specifically designed for preparation of bulk explosives. The bulk explosive came into existence only after the ingredients were mixed at the mine site, so the process of manufacture was carried out at the mines and not in the factory. Note 2 to Section VI is a classification provision for goods put up in sets of separate constituents intended to be mixed together, and it does not itself deem the carrying of materials separately to be manufacture in the factory. In the absence of a specific deeming provision treating the process as manufacture at the factory stage, the exemption could not be denied merely because the ingredients were transported separately and mixed at the mine site.

Conclusion: The exemption under Notification No. 63/95-C.E. was available to the assessee, and Note 2 to Section VI of the Schedule to the Central Excise Tariff did not defeat that entitlement.

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