2008 (11) TMI 480

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....Oil procured by them without payment of duty against C.T.3 certificates. The respondents were a 100% Export Oriented Unit engaged in the manufacture and export of Terry Towels. While they could avail the benefit of exemption from the Central Excise duty in terms of the above Notification in respect of the capital goods, raw materials, consumables etc. procured indigenously, in respect of such goods when imported, they could avail exemption from payment of Customs duty under Notification No. 53/97-Cus. dt. 3-6-97 (as amended). The Furnace Oil procured by them indigenously during the aforesaid period was used in boilers, for the generation of steam which in turn was used for drying up of finished goods. The Directorate of Anti-Evasion, after ....

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.... Thomas Stephen & Co. Ltd. - 1988 (34) E.LT. 412 (S.C.) We find that certain commodities - Cashew Shells, Lime shells which did not go into the making of the end-product but were used for purposes such as maintenance of kiln in the factory - were held not to have been 'consumed' in the manufacture of the end-product and accordingly, it was held that such commodities did not attract levy of tax under Sec. 5A(1)(a) of the Kerala General Sales Tax Act, 1963. After a perusal of the Apex Court judgment, we find that what was held therein was that goods used for ancillary purposes were not to be treated as having been 'consumed' in the process of manufacture of the finished goods. This ruling can hardly be applied to inputs used in or in relation....