Exemption for finished goods made from exempt inputs cannot be denied merely because the raw material bore no excise duty.

Exemption under Notification No. 174/84 applied to ingots, billets and bars manufactured from copper waste and scrap, even though the inputs were themselves exempt from excise duty. The legal position, as clarified by the Board's circular and the Supreme Court ratio, was that a benefit for finished goods cannot be denied merely because the inputs did not bear duty, where the exemption scheme covers goods made from such inputs. The contrary view taken by the authorities was inconsistent with that clarification, and the exemption remained available to the assessee.

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Issues: Whether ingots, billets and bars manufactured out of copper waste and scrap, which were themselves exempted, were entitled to exemption under Notification No. 174/84 dated 1-8-1984.

Analysis: The exemption question was answered by applying the Board's clarificatory circular and the ratio of the Supreme Court decision that exemption on the finished product cannot be denied merely because the inputs were exempt from excise duty, where the exemption scheme itself covers goods manufactured from such inputs. The authorities below had denied the benefit only on the footing that the inputs did not bear duty, which was contrary to the clarified legal position.

Conclusion: The exemption was available to the assessee and the denial of benefit was unsustainable.

Ratio Decidendi: Where an exemption notification is intended to apply to finished goods manufactured from specified inputs, the benefit cannot be refused solely because the inputs were exempt from excise duty.

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