Exemption for winding wires depends on qualifying input material at manufacture start, not on intermediate gauge reduction.

Winding wires made from copper wire rods exceeding 6 mm in cross-sectional dimension qualified for exemption under Notification No. 69/86 as amended where the prescribed duty had been paid on the input and Modvat credit had not been taken. The relevant test was the character of the raw material at the commencement of manufacture, not the later reduction in gauge during processing. The emergence of an intermediate product did not defeat the exemption once the qualifying input condition was satisfied. A cited decision on a different factual setting was treated as inapplicable.

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Issues: Whether winding wires manufactured from wire rods exceeding 6 mm in cross-sectional dimension were eligible for exemption under Notification No. 69/86 as amended, notwithstanding reduction in gauge during the manufacturing process and the emergence of an intermediate product.

Analysis: The exemption applied to winding wires made from specified copper products of maximum cross-sectional dimension exceeding 6 mm on which the prescribed duty had been paid and Modvat credit had not been availed. The relevant inquiry was the character of the raw material at the commencement of manufacture. The fact that the wire rods received in the factory were above 6 mm was not disputed, and the subsequent reduction in gauge was only a technical necessity in the manufacture of winding wires. The emergence of an intermediate product did not defeat the exemption when the basic condition regarding use of qualifying input material stood satisfied. The cited decision dealing with a different factual situation concerning voltage-based use did not govern the present case.

Conclusion: The winding wires were held entitled to exemption under Notification No. 69/86 as amended, and the Revenue's appeals were rejected.

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