Capital goods exemption under Notification No. 67/95 applies even when manufacturer and user are different within the factory.

Notification No. 67/95 was applied to capital goods under Rule 57Q where the goods were manufactured by one person and used by another within the factory. The Tribunal treated the manufacturer-user distinction as immaterial because the goods were accepted as capital goods and were used in the same factory in which they were manufactured. On that basis, the exemption remained available once the statutory conditions were otherwise satisfied, and the duty demand and penalty could not survive.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 67/95 in respect of the plant constituted as capital goods under Rule 57Q, even though the goods were manufactured by one person and used by another within the factory of production.

Analysis: The goods were accepted as capital goods falling under Rule 57Q and it was also not disputed that they were used within the factory where they were manufactured. The only objection was that the person who manufactured the plant was different from the person who subsequently used it. The Tribunal treated this distinction as immaterial and followed its earlier view that the exemption applies in an identical situation. The benefit of the notification was therefore available notwithstanding that the manufacturer and user were different persons.

Conclusion: The appellant was entitled to the exemption under Notification No. 67/95, and the demand of duty and penalty could not survive.

Ratio Decidendi: A capital goods exemption tied to use within the factory is not denied merely because the manufacturer of the goods is different from the person who puts them to use, where the statutory conditions are otherwise satisfied.

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