1995 (7) TMI 381

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....cted because the art silk yarn purchased by the assessee was not consumed in the manufacture of silk cloth. The assessment year involved in this case is 1976-77. During the relevant assessment year, the crucial word used in section 7-A is that the raw materials purchased should be "consumed " in manufacturing the end-product. Though it was by later amendment the word used was introduced, but during the relevant assessment year the crucial word in section 7-A is "consumed". Hence the point for consideration is whether the assessee has consumed the raw materials purchased, viz., the art silk yarn in the manufacture of art silk cloth. The Kerala High Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) v. Pio Food Packers ....

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....sult, its identity must have been completely lost. So long as its identity remained, the goods purchased and used in the manufacture of some other goods cannot be said to have been consumed in the process of manufacture of other goods." 3.. If we consider the fact arising in this case, according to the test laid down by the Kerala High Court in the decision cited supra, we have to hold that the identity of the art silk thread was not got lost even after the cloth was woven with the said thread. It means the identity of the silk thread would well remain as it is even after the cloth was manufactured out of the art silk yarn. 4.. According to the facts arising in State of Tamil Nadu v. K. Narayanaswamy Chetty and Sons (T.C. No. 1183 of ....