Duty-free procurement of factory office equipment extends to a safe used for storing raw and finished diamonds under the exemption notification.

A Godrej safe procured by a 100% export-oriented undertaking for storing raw and finished diamonds was treated as eligible for duty-free procurement under Notification No. 126/94-C.E. because it was installed in the factory and fell within the notification's broad category of office equipment. The lower authorities' narrower view that the safe was outside the annexure was not accepted, and the demand was therefore held unsustainable.

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Issues: Whether a Godrej safe procured by a 100% export-oriented undertaking for storing raw and finished diamonds was eligible for duty-free procurement under Notification No. 126/94-C.E. dated 02.09.1994.

Analysis: The safe was procured against a CT-3 certificate and was installed in the factory premises. The relevant annexure to the notification permitted, among other items, capital goods, spares, material handling equipment, office equipments, consumables, and other specified goods for duty-free import or procurement. On the facts, the safe used for storing valuable raw material and finished goods was treated as falling within the category of office equipments covered by the notification. The view taken by the lower authorities that the safe was outside the scope of the annexure was not accepted.

Conclusion: The assessee was entitled to the benefit of Notification No. 126/94-C.E. for procurement of the Godrej safe, and the demand was unsustainable.

Ratio Decidendi: Goods used in the factory and falling within the broad category of office equipments covered by a beneficial exemption notification are eligible for duty-free procurement when the notification permits such items.

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