Exemption for rope articles upheld where power was used only in making a separate marketable intermediate product.

An exemption for articles of ropes under Notification No. 62/87-C.E. applied where the final exempt goods were manufactured without the aid of power, even though power had been used earlier to produce a separate, marketable intermediate commodity of ropes. The exemption turned on whether power was used in making the final exempted articles, not on power used at a prior stage for a distinct product. On that basis, the exemption was upheld and the Revenue's objection failed.

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Issues: Whether the benefit of Notification No. 62/87-C.E. dated 1-3-1987, exempting articles of ropes falling under Tariff Item 56.08 if made without the aid of power, was available when power had been used in the manufacture of the intermediate commodity, namely ropes.

Analysis: The use of power was confined to the manufacture of the intermediate ropes, which were themselves a distinct and marketable commodity. Since the final articles of ropes were manufactured from that separately identifiable intermediate product, the power used for making the ropes could not be attributed to the manufacture of the articles of ropes for the purpose of denying the exemption. The exemption thus turned on whether power was used in the manufacture of the final exempted goods, not on power used in a prior stage for a different commodity.

Conclusion: The exemption under Notification No. 62/87-C.E. was correctly applied, and the issue was decided against the Revenue.

Ratio Decidendi: Where an exempt final product is manufactured from a separate marketable intermediate commodity, power used in manufacturing that intermediate commodity does not disentitle the final product from an exemption conditioned on manufacture without the aid of power.

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