Conditional exemption for parts in non-conventional energy devices fails when factory-use requirement is not satisfied.

Exemption under Notification No. 6/2002-C.E. for parts used in non-conventional energy devices applied only where the parts were consumed within the factory of production for manufacture of the specified goods. On a plain reading of the notification, that condition was mandatory and was not met because the respondent's goods were not so used within its factory. Authorities cited by the respondent were distinguished on their facts, while the precedent supporting Revenue followed the same approach to a conditional exemption. The exemption was therefore unavailable, and Revenue's appeal succeeded before CESTAT.

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Issues: Whether the respondent was entitled to exemption under Notification No. 6/2002-C.E. for parts used in the manufacture of non-conventional energy devices when the condition in the notification required the parts to be consumed within the factory of production for manufacture of the specified goods.

Analysis: The notification granted nil rate of duty to non-conventional energy devices and systems in List 9 and extended the benefit to parts only when such parts were consumed within the factory of production for manufacture of the goods specified in the relevant list. The goods manufactured by the respondent were admittedly not used within their factory for production of the items covered by the notification. On a plain reading, the condition attached to the exemption was not satisfied. Decisions relied upon by the respondent were found to concern materially different facts, while the precedent supporting Revenue applied the same interpretative approach to a similar conditional exemption.

Conclusion: The respondent was not entitled to the exemption, and the Revenue's appeal succeeded.

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