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1997 (1) TMI 76 - SUPREME COURTWhether, for the purpose of classification under Item 11AA(2), a product should be derived directly from the refining of crude petroleum? Held that:- The use of the words "derived from" in Item 11AA(2) suggests that the original source of the product has to be found. Crude petroleum is refined to produce raw naphtha. Raw naphtha is further refined, or cracked, to produce the said products. This is not controverted. It seems to us to make no difference that the appellants buy the raw naphtha from others. The question is to be judged regardless of this, and the question is whether the intervention of the raw naphtha would justify the finding that the said products are not "derived from refining of crude petroleum". The refining of crude petroleum produces various products at different stages. Raw naphtha is one such stage. The further refining, or cracking, of raw naphtha results in the said products. The source of the said products is crude petroleum. The said products must, therefore, be held to have been derived from crude petroleum. In favour of assessee.
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