Captive consumption exemption denied for parts used in looms cleared to export-oriented units; later amendment not retrospective.

Captively consumed parts used in the manufacture of looms cleared to 100% export-oriented units were not eligible for exemption under Notification No. 217/86-C.E. for the relevant period because the notification applied only where the final products were chargeable to duty. The later amendment by Notification No. 33/92-C.E. extended the benefit to clearances to free trade zones and 100% export-oriented units only from 01-03-1992, and it could not be applied retrospectively. The valuation aspect was not pursued, as no grievance was raised against that part of the appellate order.

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Issues: Whether parts and components captively consumed in the manufacture of looms cleared to 100% export-oriented units were eligible for exemption under Notification No. 217/86-C.E., and whether the later amendment could be applied retrospectively.

Analysis: The exemption under Notification No. 217/86-C.E. was confined to goods captively consumed only where the final products were chargeable to duty. The amendment introduced by Notification No. 33/92-C.E. extended the benefit to clearances to free trade zones and 100% export-oriented units only from 01-03-1992. The later amendment could not be read back into the parent notification for the earlier period. The appeal also did not survive on the valuation aspect, as no grievance was made against that part of the appellate order.

Conclusion: The captively consumed parts used in the manufacture of looms cleared to 100% export-oriented units were not eligible for exemption under Notification No. 217/86-C.E. for the relevant period.

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