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Counsel for the respondent originally submitted that the goods in issue were not "in inventory" because they were not held for the purpose of being sold to others in the ordinary course of the appellants' businesses, but were held to be used in the production of articles, which, in turn, would be sold. Citing the Supreme Court of Canada's decision in Her Majesty the Queen v. York Marble, Tile and Terrazzo Limited, [9] counsel argued that materials that are to be given new forms, qualities and properties or combinations, and are thereby to be used in the production of articles, are held for the purpose of manufacture, not for the purpose of sale.
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