Consumable exemption for fuel used in export manufacture under Notification No. 1/95-C.E. remains available despite later amendment.

Fuel such as furnace oil, HSD and LDO procured by a 100% EOU under Notification No. 1/95-C.E. was treated as "consumable" because it was used in manufacture of export goods and was eventually used up in the process. Applying earlier Tribunal decisions, the commentary notes that the later amendment did not take away the exemption where the goods otherwise fell within the notification. The operative effect is that such fuel remained covered by the exemption, and the related duty demand and penalties were not sustainable.

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Issues: Whether furnace oil, HSD and LDO procured by a 100% EOU under Notification No. 1/95-C.E. could be treated as consumables and remain exempt from duty.

Analysis: The goods were undisputedly procured under the exemption notification and were used in the manufacture of final products which were exported. The dispute turned on the meaning of "consumable" in the notification. Following earlier Tribunal decisions, fuel used in the manufacturing process was treated as a commodity eventually used up and, therefore, falling within the expression "consumable". The subsequent amendment did not exclude the earlier benefit where the goods were otherwise covered by the notification.

Conclusion: Furnace oil, HSD and LDO were covered by the term "consumable" under Notification No. 1/95-C.E., and the demand and penalties were unsustainable.

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