Exemption under Notification 281/86 for in-factory repair and maintenance work was upheld for goods made in the machine shop.

Notification No. 281/86 was applied to goods manufactured in a machine shop used for repair and maintenance work within factory premises, on the basis that the workshop formed part of the factory's internal setup. The Tribunal accepted that machining and repair activities carried on inside the plant for repair and maintenance purposes fell within the notification, and it treated prior decisions on the same issue as directly applicable. The benefit of the exemption was therefore available, and the denial of exemption was unsustainable.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 281/86 in respect of goods manufactured in the machine shop used for repair and maintenance work within the factory premises.

Analysis: The Tribunal noted that the exemption under Notification No. 281/86 had repeatedly been considered in relation to machining and repair work carried out inside the plant premises. It accepted the appellant's position that the machine shop formed part of the workshop within the factory and that the notification applied where such work was done within the factory premises for repair and maintenance purposes. On that basis, the earlier decisions cited by the appellant were found to squarely cover the case.

Conclusion: The benefit of Notification No. 281/86 was held to be available to the appellant, and the denial of exemption was unsustainable.

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