Captive use exemption for clinker: goods wholly consumed in cement manufacture were held not liable to duty.

Clinker manufactured within the factory and wholly consumed captively in the manufacture of cement was held not liable to duty under Explanation VI to Notification No. 1/93. Earlier Tribunal rulings were treated as settling that goods produced in the factory and fully used in the manufacture of specified goods are not subjected to duty in such captive-use situations. The argument that the explanation merely excluded value and did not confer exemption was rejected, and no duty was leviable on the clinker used captively.

---

---

Issues: Whether clinker manufactured within the factory and used entirely captively in the manufacture of cement was liable to duty under Explanation VI to Notification No. 1/93.

Analysis: The issue of duty on clinker was treated as settled by earlier Tribunal decisions interpreting Explanation VI to Notification No. 1/93. On that interpretation, goods manufactured in the factory and wholly consumed captively for manufacture of specified goods were not to be subjected to duty liability. The contrary view that the explanation merely excluded value and did not grant exemption was not accepted.

Conclusion: No duty was leviable on clinker manufactured by the appellants and used captively in the manufacture of cement.

---