Exemption for goods in export units under Notification No. 123/81-C.E. turned on broader manufacturing and packaging use.

Notification No. 123/81-C.E. was read as extending exemption to capital goods and other specified goods brought into a 100% Export Oriented Unit in connection with manufacture and packaging of articles, not only goods directly used in production. The Tribunal treated the wording as broader than a narrow use-based test and referred to an earlier decision where eligibility depended on the relevant certificate and the nature of the goods. The impugned order was set aside and the matter was remanded to the original authority for fresh decision after hearing the appellants.

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Issues: Whether goods such as tables, linking sides, screen panels, shelves, self columns, top supports, cable conducts and chairs brought into a 100% Export Oriented Unit were eligible for exemption under Notification No. 123/81-C.E. as capital goods or goods brought in connection with the manufacture and packaging of articles.

Analysis: The exemption covered capital goods and other specified goods when brought in connection with the manufacture and packaging of articles. The Tribunal noted that the expression used in the notification is wider than a restricted phrase limited to goods directly used in manufacture. It also relied on an earlier Tribunal decision dealing with Notification No. 123/81-C.E., where the matter had been remanded for factual determination in the light of the relevant certificate and the nature of the goods.

Conclusion: The impugned order was set aside and the matter was remanded to the original authority for fresh decision after hearing the appellants.

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