Factory workshop exemption covers repair goods made inside the factory and used for machinery maintenance.

Goods manufactured in a portion of a factory and used for lining furnaces were treated as eligible for exemption under Notification No. 281/86, because the notification was read purposively to cover goods made for repairing machinery used in the factory. The Tribunal held that, since the goods were admittedly used inside the factory for repair-related work, the manufacturing area could be regarded as a "workshop" for the exemption. As the term "workshop" was not defined, a part of the factory used for producing repair goods was sufficient to satisfy the notification. The exemption claim was therefore accepted and consequential relief followed.

---

---

Issues: Whether ramming mass and burnt dolomite, manufactured in a portion of the factory and used for lining the furnaces, were eligible for exemption under Notification No. 281/86 as goods manufactured in a workshop in the factory for repair of machinery used in the factory.

Analysis: The notification was construed in the light of its object, namely to exempt goods manufactured for repairing machinery used in the factory. The fact that the goods were admittedly used inside the factory for lining the furnaces showed that they were employed for repair-related work. The Tribunal further held that the expression "workshop" was not defined, and the portion of the factory where these goods were manufactured could be treated as a workshop for the purpose of the notification.

Conclusion: The goods were held eligible for the benefit of Notification No. 281/86.

Final Conclusion: The exemption claim succeeded and the appeals were allowed with consequential relief.

Ratio Decidendi: Where a notification grants exemption to goods manufactured in a workshop in a factory for repair of machinery, a portion of the factory used to manufacture goods for repairing machinery or equipment inside the factory may be treated as a workshop for the purpose of the exemption.

---