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2015 (10) TMI 2398 - AT - Central ExciseManufacture - captive consumption - Department contends that the UDMH manufactured by the appellant and used for mixing with HH in the ratio of 75:25 has to be treated as an intermediary product and since it has been used in the manufacture of an exempted final product, the benefit of exemption notification No.67/95 is not available - Held that:- Admittedly UH25 is manufactured by mixing 75% of UDMH and 25% of HH in mixing container and thereafter thoroughly stirred for 90 minutes to meet the required density and specifications. According to the decision of the Hon ble Supreme Court, to call a process as manufacture it should result in emergence of a new product with distinct name, character and use. In this case there is no doubt that ISRO has given a new name UH25. The question that arises is whether it has attained a different character and is for a different use. As regards use, there is no dispute that both UDMH and HH25 are used for the same purpose viz., as a rocket propellant or fuel. In the absence of any evidence to show that there is a change in the character of the product and use of the product, we cannot say that Department has been able to show that a new product, as per the definition of manufacture laid down by the Hon’ble Supreme Court, has emerged. In such a situation, when by mixing UDMH and HH a new product is not emerging, it cannot be said that UDMH has been captively consumed in the manufacture of a product which is exempted and therefore duty liability has to be discharged on UDMH manufactured by the appellants and used within the factory. - appellants have been able to show that there is no manufacture and no new product is emerging by mixing UDMH and HH and therefore the stand taken by the Revenue and the impugned order are not sustainable. - Decided in favour of assessee.
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