Feed stock exemption denied for furnace oil used only to raise steam during urea plant trial runs and commissioning.

Furnace oil used only to generate steam during trial runs and commissioning of a urea plant, where no urea was produced, did not qualify as use as "feed stock" for exemption under the notification. The exemption was limited to furnace oil used as feed stock in the manufacture of fertilizer, and mere steam generation was held not to satisfy that description. The benefit of exemption was therefore unavailable.

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Issues: Whether furnace oil used for generating steam in a urea plant during trial runs and commissioning, without production of urea, could be treated as use as "feed stock" so as to qualify for exemption under the relevant notification.

Analysis: The exemption was confined to furnace oil used as feed stock in the manufacture of fertilizer. The Tribunal applied its earlier view on the same notification and held that furnace oil or low sulphur heavy stock used merely for generation of steam does not answer the description of feed stock used in manufacture. Use during trial runs and commissioning, where no urea was produced, did not bring the consumption within the notification.

Conclusion: The use of furnace oil for raising steam during trial runs and commissioning was not use as feed stock, and the assessee was not entitled to the benefit of the exemption.

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