Exemption for captive dolomite use turns on product classification and duty status of the final iron and steel goods.

Burnt dolomite used within the factory for maintenance of plant and machinery qualified for exemption under Notification No. 281/86-C.E. because its classification under Tariff Heading 2804.90 was settled and prior precedent in the assessee's own case covered such use; the exemption was allowed. Calcined dolomite used captively as a fluxing agent under Notification No. 217/86-C.E. depended on whether the final iron and steel products were dutiable and not fully exempt, a factual question not examined below; the matter was remanded for limited reconsideration on that point.

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Issues: (i) Whether burnt dolomite used within the factory for maintenance of plant and machinery was entitled to exemption under Notification No. 281/86-C.E.; (ii) Whether calcined dolomite used captively as a fluxing agent for manufacture of iron and steel products was entitled to exemption under Notification No. 217/86-C.E.

Issue (i): Whether burnt dolomite used within the factory for maintenance of plant and machinery was entitled to exemption under Notification No. 281/86-C.E.

Analysis: The classification of the product had already been settled as falling under Tariff Heading 2804.90. The earlier decision in the assessee's own case had recognized that the exemption under Notification No. 281/86-C.E. was available where burnt dolomite was used in the maintenance of the furnace installed in the factory. There was no dispute that the product was so used.

Conclusion: The benefit of Notification No. 281/86-C.E. was extended to burnt dolomite, in favour of the assessee.

Issue (ii): Whether calcined dolomite used captively as a fluxing agent for manufacture of iron and steel products was entitled to exemption under Notification No. 217/86-C.E.

Analysis: The product was treated as falling under Tariff Heading 2804.90. The availability of the exemption under Notification No. 217/86-C.E. depended on whether the final product, iron and steel, was dutiable and not fully exempt. That factual aspect had not been examined by the lower authority, so the question required fresh consideration.

Conclusion: The issue was remanded for limited examination of the dutiability of the final product and reconsideration of entitlement under Notification No. 217/86-C.E., in favour of neither side at this stage.

Final Conclusion: The assessee succeeded on the claim relating to burnt dolomite, while the claim relating to calcined dolomite was sent back for limited readjudication on the question of duty liability of the final product.

Ratio Decidendi: Exemption on captive-consumed intermediate goods turns on the specific terms of the notification and, where entitlement depends on the duty status of the final product, that factual predicate must be determined before granting relief.

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