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2016 (10) TMI 819 - HC - CustomsFTP - 100% EOU - deemed export benefit - DTA unit having a captive power plant supplies electricity to 100% EOU - zinc manufactured in the export oriented unit consumes electricity manufacturing process to obtain zinc - whether electricity is a "consumable" item as defined under para 9.15 of the FTP and as referred in para 6.6.1 of HBP-I and is entitled for exemption? - Held that: - The process of obtaining zinc, clearly indicates that the electrolytic process is necessary to have zinc. For electrolytic process the essential input is electricity. It is not in dispute that the electricity is a goods and that goods, though intangible, is consumed in obtaining the final product. True it is, the electricity is not a part of end product, but it is substantially consumed in the process to manufacture the end product. Para 9.15 of the FTP in specific terms provides that any item, which participates in or is required for manufacturing process, but does not necessarily form part of end product items, but substantially or totally consumed in the process aforesaid, is a "consumable". The electricity, in our considered opinion, not only participates, but is substantially consumed in manufacturing process of zinc, thus, is a "consumable" as per para 9.15 of FTP. Clause (a) of para 6.6.1 of HBP-I mentions raw materials, consumables, intermediates, spares and packing materials. All these terms give a general connotation and each and every term may include several goods. The electricity, as already discussed above, comes within the purview of "consumables" as defined under para 9.15 of the FTP, hence, we are of considered opinion that it is nothing but a goods permitted to be imported/procured from DTA. True it is, in para 6.6.1 of HBP-I, certain electricity equipments including DG sets, Captive Power Plants and transformers are specifically mentioned, but these are the equipments to generate electricity, whereas the electricity is a goods "consumable" for production of zinc. In view of it, it is having its separate identity which is required to be appreciated with its own qualities. The process of electrolytic cannot take place without consuming electricity and, therefore, its consumption in production of zinc is apparent - the electric power being a "consumable" as per para 9.15 of FTP deserves to attract clause 6.6.1 of HBP-I (6.5.1 of HBP) - the petitioner is entitled to have deemed export benefit for its Domestic Tariff Area Unit to hundred percent Export Oriented Unit - petition allowed - decided in favor of petitioner.
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