Duty-free HSD oil for forklift use by a 100% EOU did not require prior departmental approval under the exemption notification.

Notification No. 1/95-C.E. allowed a 100% Export Oriented Unit to procure capital goods, raw materials and consumables without duty. The approval requirement in Annexure-I, S. No. 3B applied to fuel, lubricants and consumables used for a captive power plant, not to HSD oil used in a forklift operating as material handling equipment. On that construction, prior approval of the Assistant Commissioner or Deputy Commissioner was not necessary for such forklift use, and the exemption remained available.

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Issues: Whether prior approval of the Assistant Commissioner or Deputy Commissioner was required for receipt of HSD oil, without payment of duty, when the oil was used in a forklift deployed as material handling equipment by a 100% Export Oriented Unit under Notification No. 1/95-C.E. dated 4-1-95.

Analysis: The notification granted exemption to a 100% Export Oriented Unit for procurement of capital goods, raw materials and consumables without payment of duty. The approval requirement under Annexure-I, S. No. 3B applied to fuel, lubricants and consumables for a captive power plant. The HSD oil in question was used in a forklift, which was material handling equipment, and not for the captive power plant. On that construction, the permission requirement could not be extended to such use.

Conclusion: The prior approval of the Assistant Commissioner or Deputy Commissioner was not required for HSD oil used in the forklift, and the exemption was available to the assessee.

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