G.A. Brahma Deva, Member (J)

1. This is an appeal preferred against the impugned order dated 24-5-1988 passed by the Collector of Central Excise Customs, Pune.

2. The point to be considered in this case is whether gauges/templates (measuring instruments) lifting tackles, trolleys, conveyors, carrier (material handling equipments) manufactured by the appellants and utilised for captive consumption are eligible for exemption under Notification No. 217/86-C.E., dated 2-4-1986. This notification exempts "inputs" used in or in relation to the manufacture of goods notified under MODVAT. However, as per the proviso to the Notification it excludes from purview of said exemption apparatus, machinery, equipments etc. "used for" the manufacture of the goods. By the impugned order, the Collector held that items in question are excluded by the explanation and hence, they would not qualify for exemption. Hence this appeal.

3. Relevant Notification No. 217/86-C.E., dated 2-4-1986 reads as under:-

"Exemption to MODVAT items if used within the factory of production in the manufacture of finished goods.-

In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 194