Furnace oil exemption for 100% EOU confirmed where fuel falls within raw materials or consumables.

Furnace oil used as fuel by a 100% Export Oriented Unit was treated as eligible for exemption under Notification No. 1/95 where the notification extended benefit to raw materials or consumables. The Tribunal relied on its earlier ruling, as affirmed by the Supreme Court, that furnace oil procured and used in manufacture by a 100% EOU falls within the exemption. On that settled position, exemption could not be denied to the unit's furnace oil, and the Revenue's challenge failed.

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Issues: Whether furnace oil procured and used by a 100% Export Oriented Unit was eligible for exemption under Notification No. 1/95 dated 04.01.1995 as a raw material or consumable.

Analysis: The exemption claim turned on the character of furnace oil used in the manufacture by a 100% EOU. The Tribunal relied on its earlier decision holding that furnace oil procured and used as fuel by a 100% EOU was covered by the exemption notification, and noted that the said view had been affirmed by the Supreme Court. In view of that settled position, the furnace oil could not be denied exemption under the notification.

Conclusion: The furnace oil was held eligible for exemption under Notification No. 1/95 dated 04.01.1995, and the Revenue's appeal failed.

Ratio Decidendi: Furnace oil used as fuel by a 100% Export Oriented Unit qualifies for exemption where the controlling notification extends benefit to raw materials or consumables.

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