Notification exemption for raw materials used through intermediates in pesticide manufacture upheld under Chapter X procedure.

Notification No. 43/88 exempted phosphorous trichloride when it was used in the manufacture of goods falling under sub-heading 3808.10, and Chapter X procedure applied where the material moved through another use. The exemption was held to extend to use through the intermediate product trimethyl phosphite, because that intermediate was itself used to manufacture insecticides and pesticides under sub-heading 3808.10. The prior view in the assessee's own case had already treated denial of relief merely because the product reached the final goods through an intermediate as inconsistent with the Notification's object. The benefit of the Notification was therefore available.

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Issues: Whether the benefit of Notification No. 43/88 was available to phosphorous trichloride when it was used in the manufacture of trimethyl phosphite, which was in turn used in the manufacture of insecticides and pesticides falling under sub-heading 3808.10.

Analysis: The Notification exempted specified products if they were used in the manufacture of goods falling under sub-heading 3808.10, and where used elsewhere, Chapter X procedure was required. The use of trimethyl phosphite in the manufacture of insecticides and pesticides was not in dispute, and the intermediate had been cleared under Chapter X procedure. The prior decision in the assessee's own case had already recognised that denial of exemption merely because the product emerged through intermediates would defeat the object of the Notification. The exemption was intended to cover the specified raw materials even where they were used indirectly through intermediates for manufacture of insecticides and pesticides.

Conclusion: The benefit of Notification No. 43/88 was available and the Revenue's challenge failed.

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