Exemption for goods used through intermediate products in furnace repair and maintenance was upheld under the notification.

Goods used to manufacture refractory bricks, which were then used for repair and maintenance of a furnace, were held to fall within Notification No. 281/86-C.E. The notification was interpreted broadly enough to cover ultimate use in repair and maintenance through an intermediate product, because it did not require direct use of the goods in the furnace itself. On that basis, the exemption was available and the departmental challenge failed.

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Issues: Whether goods used in the manufacture of refractory bricks, which were in turn used for repair and maintenance of furnace, qualified for exemption under Notification No. 281/86-C.E. dated 24-4-1986.

Analysis: The manner of use of the goods was not disputed. The goods were used to manufacture refractory bricks, and those bricks were ultimately used for repair and maintenance of the furnace installed in the factory. The notification was held to be wide enough to cover goods ultimately used for repair and maintenance, even through an intermediate product, and it did not require direct use of the goods in the furnace itself.

Conclusion: The exemption was available to the goods in question, and the Revenue's challenge failed.

Final Conclusion: The order granting exemption was upheld and the departmental appeal was rejected.

Ratio Decidendi: Where an exemption notification covers goods used for repair and maintenance, direct use is not necessary if the goods are ultimately so used through an intermediate product, provided the notification does not impose a direct-use condition.

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