Captive use of replacement rolls for machinery repair qualifies for exemption under the relevant notification.

Rolls manufactured in the appellant's workshop and captively used to replace worn out rolls in a rolling mill were treated as goods used for repair and maintenance of machinery. On that basis, the captive use was found to fall within Notification No. 281/86. The contrary decision cited was distinguished because it involved rolls not used for repair and maintenance. The exemption was therefore upheld for the captively used rolls, and consequential relief followed.

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Issues: Whether rolls manufactured in the appellants' workshop and captively used in the factory for replacing worn out rolls in the rolling mill were eligible for exemption under Notification No. 281/86.

Analysis: Rolls are an important part of a rolling mill, and their use to replace worn out rolls constitutes repair. Such repair also serves the maintenance of the machinery. The dispute was held to be covered by the Tribunal's earlier order on the same issue, and the cited contrary decision was distinguished as it concerned a situation where the rolls were not captively used for repair and maintenance.

Conclusion: The rolls were eligible for exemption under Notification No. 281/86, and the appellant succeeded.

Final Conclusion: The exemption was upheld for the captively used rolls, and the impugned order was set aside with consequential relief.

Ratio Decidendi: Goods used to replace worn out components of machinery are used for repair and maintenance when such use is integral to keeping the machinery operational, and such captive use may qualify for exemption under the relevant notification.

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