Proforma credit for BOPP film used in manufacture was allowed where the material aided the process, not just the finished product.

Proforma credit under Rule 56A was admissible on BOPP film used as separators in the manufacture of rigid plastic laminated sheets because the governing expressions "raw material" and "component parts" were construed broadly to cover materials integrally connected with the manufacturing process. The fact that the film did not remain in the finished laminate was not decisive, as the relevant test was its use in manufacture and its role in making the product marketable. Notification No. 71/71-C.E. was also held applicable because BOPP film fell within the expression "any plastic material".

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Issues: Whether proforma credit under Rule 56A of the Central Excise Rules was admissible on BOPP film used as separators in the manufacture of rigid plastic laminated sheets, and whether Notification No. 71/71-C.E. dated 25-5-1971 extended its benefit to such film.

Analysis: The BOPP film was undisputedly used in the manufacture of the final product as separators during compression under heat and pressure. The applicable rule and the notification were interpreted in the light of Supreme Court authority construing the expressions "raw material" and "component parts" broadly, to include materials which enter into or are required for the manufacturing process and for making the article marketable. The fact that the film did not become part of the finished laminate was not decisive, because the relevant test was use in manufacture and the role of the material in the process. The notification was also read to cover BOPP film as "any plastic material".

Conclusion: Proforma credit under Rule 56A was admissible on BOPP film, and the benefit of Notification No. 71/71-C.E. dated 25-5-1971 was also available.

Ratio Decidendi: For the purpose of proforma credit and the related exemption, a material used in the manufacture need not itself form part of the finished product if it is integrally connected with the manufacturing process and falls within the breadth of the governing expression as interpreted by binding precedent.

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