Capital goods exemption for captive tools and dies was available; captive use for exempt final products did not bar the notification.

Tools and dies falling under Heading 82.07 qualified as capital goods for the purpose of Notification No. 67/95-C.E. because the notification covered goods in Heading Nos. 82.02 to 82.11. The captive-use restriction for exempt final products applied to inputs, not to capital goods, and no separate bar was shown for capital goods under the notification. The benefit of the notification was therefore available, and the demand was unsustainable.

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Issues: Whether tools and dies falling under Heading 82.07, used captively in the manufacture of exempt final products, were entitled to duty concession under Notification No. 67/95-C.E.

Analysis: The notification extended the benefit to capital goods as defined in Rule 57Q, and the relevant heading covered goods under Heading Nos. 82.02 to 82.11. Tools and dies falling under Heading 82.07 were therefore capital goods for the purpose of the notification. The disqualification based on captive use for exempt final products applied to inputs, not to capital goods, and no such bar was shown in respect of capital goods under the notification.

Conclusion: The benefit of Notification No. 67/95-C.E. was available, and the demand was unsustainable.

Ratio Decidendi: Where captive goods qualify as capital goods under the applicable notification, exemption cannot be denied merely because they are used in the manufacture of fully exempt final products unless the notification itself creates such a bar.

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