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‘CONSUMABLES’ ARE DIFFERING FROM ‘RAW MATERIALS’

Central Excise - By: - Mr. M. GOVINDARAJAN - Dated:- 2-12-2015 - The Export and Import Policy 1997 - 200, defines the expressions consumables and raw materials . The expression consumables is defined as any item which participates in or is required for a manufacturing process, but does not form part of the end product. Items which are substantially or totally consumed during a manufacturing process will be deemed to be consumables. The expression raw material is defined as- Basic materials which .....

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used in the chemical technology of manufacture of any end product might comprise, amongst others, of those which may retain their dominant individual identity and character throughout the process and also in the end product, those which as a result of interaction with other chemicals or ingredients, might themselves undergo chemical or qualitative changes and in such altered form find themselves in the end product. One of the valid test to decide whether a material is to be called as raw materia .....

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redient goes into the making of the end product in the sense that without its absence the presence of the end product is rendered impossible. This quality should coalesce with the requirement that its utilization is in the manufacturing process as distinct from the manufacturing apparatus. The Supreme Court held that the goods are consumable one which, like catalytic agents, while influencing and accelerating the chemical reactions, however, may themselves may remain uninfluenced and unaltered a .....

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ct (ancillary activity) are referred to as consumables e.g., starches, variety of chemicals, several coloring matters such as dyes and pigments etc., Power and water are other consumable items in addition to fuel oil, lubricating agents and packing materials. It is a common practice in textile industry and trade to identify and categorize raw material and consumables on such basis. Dealing with a case under a sales tax statute i.e., the Andhra Pradesh General Sales Tax Act, 1957, the Supreme Cou .....

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mables fall within a broader scope of the words raw materials . Thus as held by the Supreme Court in Coastal Chemicals Limited V. Commercial Tax Officer - 1999 (10) TMI 599 - SUPREME COURT OF INDIA, that the consumables are treated differently from raw materials . Notification No.8/97-CE, dated 01.03.1997 exempted the finished products, rejects and waste or scrap specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and produced or manufactured, in a hundred per cent expor .....

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