Feed-stock exemption denied where fuel was used only to generate steam, not as raw material in fertilizer manufacture.

Fuel used only for generating steam does not qualify as feed-stock used in the manufacture of fertilizers for exemption under the relevant notifications. The Tribunal applied its earlier view that feed-stock means the raw material actually delivered into the manufacturing process, and held that Low Sulphur Heavy Stock consumed merely to produce steam was not itself used as feed-stock in fertilizer manufacture. The fact that the steam was used in the process did not satisfy the notification requirement, so the concessional exemption was denied.

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Issues: Whether Low Sulphur Heavy Stock used for generation of steam was eligible for exemption under Notification No. 147/74 dated 3-10-1974 read with Notification No. 356/77 dated 16-12-1977 as feed-stock used in the manufacture of fertilizers.

Analysis: The Tribunal followed its earlier decisions that feed-stock means raw material delivered to a machine for process and that LSHS consumed only for generation of steam cannot be treated as feed-stock in the manufacture of fertilizers. The earlier view was not distinguishable merely because the steam was used in the manufacturing process, since the relevant requirement was use of the fuel itself as feed-stock in manufacture.

Conclusion: LSHS used for generation of steam was not eligible for the concessional exemption under the notifications, and the assessee was not entitled to the benefit claimed.

Ratio Decidendi: Fuel used only for generating steam does not qualify as feed-stock used in the manufacture of fertilizers for the purpose of exemption under the relevant notification.

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