Liberal interpretation of export zone exemption covered imported PVC tiles used in manufacturing activity for electronic goods.

Imported PVC tiles used in an export processing zone unit were treated as eligible for exemption under the notification because the goods were permitted by the Development Commissioner and were shown to be required for the manufacturing activity. The notification extended duty-free benefit to goods used in connection with manufacturing or packaging of electronic goods for export, including fixtures and related items, and the absence of a definition of "fixture" led to a liberal construction in favour of the assessee. The Revenue's challenge therefore failed, and the tiles were accepted as covered by the exemption.

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Issues: Whether imported PVC tiles used in the respondents' unit in the export processing zone were covered by the exemption notification as "fixtures" or otherwise qualified for duty-free benefit for use in connection with manufacturing of electronic goods for export.

Analysis: The notification exempted goods specified in the annexure when imported for use within the export processing zone in connection with manufacturing or packaging of electronic goods for export, and serial no. 6 covered tools, jigs, gauges, fixtures, moulds, dies, instruments and accessories. The imported tiles were shown to have been permitted by the Development Commissioner for use in the unit, and the respondents asserted that they were required to maintain a dust-free atmosphere for video cassette recording. In the absence of any definition of "fixture" in the notification and in view of the uncontroverted assertion that the goods were needed for the manufacturing activity, the exemption provision was construed in favour of the assessee.

Conclusion: The imported PVC tiles were treated as eligible for the notification benefit and the Revenue's challenge failed.

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