Complete machinery exclusion under captive-use exemption does not cover factory trolleys and carts used only for internal transport.

Notification No. 118/75-C.E. granted exemption to Item 68 goods intended for captive use, but its exclusion for "complete machinery" applied only where the goods constituted a full set of machines or equipment needed for producing or processing goods. Trolleys and carts used only for internal transport of semi-finished and finished goods were not complete machinery, because they did not themselves perform the production or processing function. On that reasoning, the exclusion clause did not apply and the exemption remained available to such goods.

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Issues: Whether trolleys and carts manufactured and used within the factory for transporting semi-finished and finished goods constituted "complete machinery" so as to fall within the exclusion clause of Notification No. 118/75-C.E. and lose the benefit of exemption.

Analysis: The notification exempted goods falling under Item 68 intended for captive use, but its proviso denied the benefit to complete machinery manufactured in a factory and meant for producing or processing goods. The expression "complete machinery" was not defined. Applying the ordinary meaning of machinery and the ratio that the phrase denotes a complete set of machines or equipment necessary for the relevant production process, trolleys and carts used only for internal transport were held not to be complete machinery for producing or processing goods. The reference to a Larger Bench was also found unnecessary, and the earlier view denying the applicability of the exclusion clause was accepted.

Conclusion: The trolleys and carts were not complete machinery within the exclusion clause, and the exemption under Notification No. 118/75-C.E. was available; the Revenue's appeal failed.

Ratio Decidendi: Where a notification excludes only "complete machinery," goods used merely as internal transport equipment in the manufacturing premises do not fall within that exclusion unless they constitute the complete machinery required for producing or processing goods.

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