CT-3 duty-free procurement for a 100% EOU upheld where post facto approval supported the notification benefit.

CT-3 procurement by a 100% EOU can qualify for Notification No. 22/2003-CE where the goods are received in the factory for the stated operational purpose and the Development Commissioner grants post facto approval. On the stated facts, the panels and related items were used to maintain the required temperature, and the later approval for duty-free indigenous procurement supported the claim to exemption. Denial of the notification benefit merely because the goods were not treated as capital goods by the lower authorities was not sustained, and the impugned order was set aside.

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Issues: Whether goods procured by a 100% EOU under CT-3 without duty payment were covered by Notification No. 22/2003-CE when they were used in the factory for maintaining required temperature and the Development Commissioner subsequently granted post facto approval.

Analysis: The material facts were not in dispute: the panels and related items were received under CT-3, used in the factory premises for the stated purpose, and the appellant obtained a specific post facto approval from the Development Commissioner for procurement of the indigenous materials without duty payment. In these circumstances, the denial of the benefit of the notification could not be sustained merely on the basis that the goods were not treated as capital goods by the lower authorities.

Conclusion: The issue was decided in favour of the assessee and the impugned order was liable to be set aside.

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