Factory workshop exemption fails where goods are not exclusively intended for in-house use and part is sold outside.

Exemption under Notification No. 281/86 depended on goods being manufactured in a factory workshop and intended for use in the factory. Because the record showed that part of the goods was also cleared for sale outside the factory, the condition of exclusive in-factory use was not met. The exemption was therefore unavailable for goods manufactured in the workshop and used in connection with kiln repairs.

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Issues: Whether the appellants were entitled to exemption under Notification No. 281/86 dated 24.04.1986 for goods manufactured in the factory workshop and used in connection with kiln repairs.

Analysis: The notification required not only that the goods be manufactured in a workshop within the factory, but also that they be intended for use in the factory. The record showed that the goods were not exclusively meant for in-factory use, as part of the goods was also being cleared for sale outside. The condition attached to the exemption was therefore not satisfied.

Conclusion: Exemption under Notification No. 281/86 was not available to the appellants.

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