End-use based exemption extends to intermediate suppliers when goods enter the manufacture chain covered by the notification.

Notification No. 63/95-CE was applied to an intermediate supplier of brake linings and clutch facings used by Bharat Earth Movers Ltd. in manufacturing goods ultimately supplied to the Ministry of Defence. The Tribunal treated the issue as covered by its earlier decision in the same appellant's case, following the view that exemption is available to vendors and intermediate manufacturers where the goods are used in the end-use chain contemplated by the notification. The fact that the supplier was not expressly named in the notification was not a valid ground to deny the benefit. The exemption was therefore admissible and the demand could not survive.

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Issues: Whether the benefit of Notification No. 63/95-CE dated 16.03.1995 extended to the appellant as a supplier of brake linings and clutch facings used by Bharat Earth Movers Ltd. for further manufacture of goods supplied to the Ministry of Defence.

Analysis: The issue was treated as covered by the Tribunal's earlier decision in the appellant's own case. That decision had held that the notification applied to vendors and intermediate manufacturers supplying goods for use in the manufacture of articles ultimately supplied to the Ministry of Defence. The earlier view was also supported by a decision confirmed by the Supreme Court, and therefore the exemption could not be denied on the ground that the appellant was not itself one of the units named in the notification.

Conclusion: The exemption was held admissible and the demand could not survive.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where a notification extends exemption to goods used in a specified end-use chain, it cannot be denied to an intermediate supplier merely because the supplier is not expressly named, if the goods are used in the manner contemplated by the notification.

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