Meaning of ‘For Use’ :
Some notifications use the words ‘for use in . . . .’ In such cases, ‘for use’ means ‘intended for use’. If the intention of Legislature was to limit the exemption only to goods actually used, the wording would have been different – State of Haryana v. Dalmia Dadri Cement Ltd. – 1988 (14) ECR 292 (SC) = 1987 (Supp) SCC 679 = AIR 1988 SC 342 = 68 STC 173 = 178 ELT 13 (SC) – followed in BPL Display Devices v. CCE 2004 (174) ELT 5 (SC) – also followed in Asean Trading Agency v. CC – 1991 (55) ELT 253 (CEGAT), where it was observed that, if condition regarding production of proof of actual use, bond for that purpose etc. are not prescribed in the exemption notification, proof of actual use is not necessary. In absence of any condition regarding proof of use, ‘for use’ means ‘for intended use’. In this case, the exemption notification was held as applicable even when the buyer was a stockist for sale and not a manufacturer. – quoted and followed in Preet Chattons v. CC – 1996 (12) RLT 636 = 1996 (86) ELT 60 (CEGAT – 3 member bench). – similar views in Sha HarakchandDharmaji v. CC – 1996 (88) ELT 764 (CEGAT) * Mentha v. CCE 1999(112) ELT 600 (CEGAT) * National Organic Chemical v. CC 2000(126) ELT 1072 (CEGAT) [order confirmed by SC – 142 ELT A280 (SC) * Phoenix International v. CC 2001(138) ELT 484 (CEGAT) * A K Exporters v. CC 2003 (157) ELT 153 (CESTAT) * B G Exploration v. CC (2014) 301 ELT 81 (CESTAT).
In Steel Authority of India Ltd. v. CCE 1996(88) ELT 314 (SC), it was held that ‘intended for use’ means actual use is not necessary. In this case, exemption was available if inputs were ‘intended for use’ of final product. Some quantity of inputs was not actually utilised but lost on account of unavoidable technological necessity. It was held that the inputs were purchased for ‘intended use’ and hence exemption is applicable – same view in CC v. Suraj Industries Ltd. 2006 (198) ELT 199 in respect of transit loss and evaporation
loss.
In Tata Oil Mills Co. Ltd. v. CCE (1989) 4 SCC 541 = 43 ELT 183 = 82 STC 225 = AIR 1990 SC 27 (SC), looking to the purpose and object of the exemption notification, it was held that indirect use is also permissible.
If the exemption notification uses the term ‘used elsewhere in the manufacture’, it does not mean that the use must be in the same factory. It can be used in off site plant. The use may be direct or indirect. – Indian Fertiliser Coop Ltd. v. CCE – 1996 (5) SCALE 501 (SC).