Intermediate goods exemption extended to captive coke oven gas and blast furnace gas used in steel manufacture

Coke oven gas and blast furnace gas used captively within the same steel factory were treated as intermediate goods eligible for exemption under Notification No. 58/75, as amended by Notification No. 77/75. In the absence of a statutory definition, the term "intermediate goods" was construed liberally and not limited to goods arising only at an intermediate stage of a single manufacturing process. Goods produced in the course of manufacture and consumed within the factory for making excisable steel products fell within the notification's scheme, including its reference to component parts.

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Issues: Whether coke oven gas and blast furnace gas, used captively in the manufacture of steel products within the same factory, were entitled to exemption as intermediate goods under Notification No. 58/75 as amended by Notification No. 77/75.

Analysis: The expression "intermediate goods" was held not to be confined to goods arising only at an intermediate stage in the same process of manufacture. In the absence of a statutory definition, the notification was interpreted liberally in light of its scheme, including the reference to component parts, to cover goods arising in the course of manufacture in the factory and used there in the manufacture of excisable goods. Coke oven gas and blast furnace gas were admittedly produced and consumed within the steel plant for manufacture of steel products, bringing them within the exemption.

Conclusion: The goods qualified for exemption under Notification No. 58/75 as amended, and the issue was decided in favour of the assessee.

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