Captive consumption exemption covers inputs used to make moulds for final-product manufacture under the successor notification.

Exemption under Notification No. 67/95-C.E. extends to castings used in manufacturing moulds where those moulds are themselves used in relation to the manufacture of the final products. The Tribunal applied the Supreme Court's captive-consumption principle and treated Notification No. 217/86-C.E. as the predecessor of Notification No. 67/95-C.E. for this purpose. On that basis, the inputs used for mould-making remained eligible for exemption, and the assessee was found entitled to the benefit.

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Issues: Eligibility to exemption under Notification No. 67/95-C.E. for castings used in the manufacture of moulds and for manufacture of glass bottles.

Analysis: The exemption dispute turned on whether the castings used to manufacture moulds, which were themselves exempted goods, could still qualify for benefit when used as inputs in relation to the manufacture of the final products. The Tribunal followed the Supreme Court's ruling that exemption for captive consumption is available where the input is used in making moulds that are in turn used in the manufacture of the final products, and treated Notification No. 217/86-C.E. as the predecessor of Notification No. 67/95-C.E. for this purpose.

Conclusion: The assessee was held entitled to the exemption and the appeals were allowed.

Ratio Decidendi: Exemption for captive consumption extends to inputs used in manufacturing moulds when those moulds are used in relation to the manufacture of the final products, including under the successor exemption notification.

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