Input used in manufacture test applied to acetone in dissolved acetylene, securing exemption under Notification No. 201/79-CE.

Acetone used in dissolved acetylene was treated as an input used in the manufacture of the finished product for purposes of Notification No. 201/79-CE. The Tribunal applied the test that a material is covered where it is integrally connected with the ultimate production and, without it, manufacture would be commercially inexpedient. Because acetone was necessary to safely dissolve, store and market acetylene in cylinders, its use was not merely incidental or remote but formed part of the manufacturing process. The respondent was therefore entitled to the exemption.

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Issues: Whether acetone used in dissolved acetylene qualified as an input used in the manufacture of dissolved acetylene so as to attract exemption under Notification No. 201/79-CE.

Analysis: The exemption under Notification No. 201/79-CE applied where duty-paid goods falling under Tariff Item 68 were used as raw materials or component parts in the manufacture of excisable goods. Acetone was not disputed to be duty paid and to fall under Tariff Item 68. The essential question was whether its use in dissolved acetylene was sufficiently connected with manufacture. Applying the test that a process or material is covered when it is so integrally connected with the ultimate production that, without it, manufacture would be commercially inexpedient, the Tribunal held that acetone was necessary for safely dissolving, storing, and marketing acetylene in cylinders. The use was therefore not merely incidental or remote, but part of the manufacturing process of dissolved acetylene.

Conclusion: Acetone was an input used in the manufacture of dissolved acetylene, and the respondent was entitled to the exemption under Notification No. 201/79-CE.

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