Exemption for export-oriented granite use upheld despite no quarry ownership or lease under a lawful State arrangement.

A 100% export-oriented unit using granite from a State-owned quarry under a permitted arrangement was held entitled to exemption under Notification No. 37/2000-CE because the quarrying and export-linked processing satisfied the notification's condition. The absence of ownership of, or a quarry lease in, the appellant's name did not defeat the benefit, as Rule 8A of the Tamilnadu Minor Mineral Concession Rules, 1959 left quarry leases and allied permissions under State control and did not exclude use under another lawful arrangement. Denial of the exemption on that basis would defeat the object of the notification.

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Issues: Whether a 100% Export Oriented Unit that used granite from a State-owned quarry under an agreement, without itself owning or holding a quarry lease, was entitled to the benefit of Notification No. 37/2000-CE dated 8.5.2000.

Analysis: The quarry belonged to the Government of Tamilnadu and the appellant used it under an arrangement permitted by the State. Rule 8A of the Tamilnadu Minor Mineral Concession Rules, 1959 shows that quarry leases and allied permissions are within the State's control, and use under another lawful arrangement is not excluded. Since the goods procured without payment of duty were used in quarrying granite and processing it for export, the condition underlying the exemption notification was satisfied. Denial of the benefit merely because the appellant did not own or lease the quarry would defeat the object of the notification.

Conclusion: The appellant was entitled to the exemption benefit under Notification No. 37/2000-CE dated 8.5.2000, and the contention based on absence of ownership or lease failed.

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