Capital goods exemption for diesel generating set components upheld for a 100% export oriented unit

Oil tanks, sag rods and supporting structures received by a 100% export oriented unit for installation and operation of a diesel generating set were treated as eligible for exemption under Notification No. 123/81-C.E. The notification covered excisable capital goods, components and raw materials brought in connection with manufacture in the unit, and the diesel generating set was regarded as capital goods for this purpose. Receipt under CT-3 certificates also supported exemption treatment. The Revenue's challenge was rejected.

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Issues: Whether oil tanks, sag rods and supporting structures received by a 100% export oriented unit for installation and operation of a diesel generating set were eligible for exemption under Notification No. 123/81-C.E. dated 2-6-1981.

Analysis: The notification granted exemption to excisable capital goods, components and raw materials brought in connection with manufacture in a 100% export oriented undertaking, and it did not itself define capital goods. The goods in question were intended for use in installing and operating the diesel generating set, which was treated as capital goods for the purpose of the exemption. The Tribunal also noted that the goods had been received under CT-3 certificates, supporting their treatment as exempted goods for the unit.

Conclusion: The goods were held eligible for exemption, and the Revenue's challenge was rejected.

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