Exemption for boilers designed for non-conventional fuel upheld where exclusive fuel use was not required.

Exemption under Notifications Nos. 120/81 and 205/88 could not be denied where the notifications did not require exclusive use of agricultural or municipal waste as fuel, and the competent boiler authority certified that the boilers were specially designed for low-calorific non-conventional fuel, including paddy husk. Revenue produced no contrary evidence, and the cited precedent was distinguishable because it concerned boilers designed for coal use. The exemption granted by the lower authority was therefore upheld and the Revenue's challenge failed.

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Issues: Whether boilers manufactured by the respondent were entitled to exemption under Notification No. 120/81 and Notification No. 205/88 on the basis that they were designed for use of agricultural and municipal waste as fuel.

Analysis: The notification did not prescribe any condition that the boilers must be exclusively or entirely dependent on agricultural and municipal waste as fuel. The certificate issued by the Chief Inspector of Boilers, the technical authority under the Indian Boiler Regulations, 1950, stated that the boilers were specially designed exclusively on the basis of low calorific agricultural waste fuels, and that special design features were provided for use of paddy husk. No contrary evidence was produced by Revenue. The cited precedent was distinguishable because it involved boilers specially designed for coal use, whereas the present boilers were specially designed for non-conventional fuel use.

Conclusion: The respondent was entitled to the exemption and the Revenue's challenge failed.

Final Conclusion: The exemption allowed by the lower authority was upheld and the Revenue appeal was dismissed.

Ratio Decidendi: Where an exemption notification does not require exclusive use of a specified fuel, and the competent technical certificate establishes that the equipment is specially designed for the notified non-conventional fuel, the exemption cannot be denied merely because the equipment may also be capable of using conventional fuel.

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