Liberal construction of exemption entry brings conveyors and control panels used in boiler manufacture within notification coverage.

An exemption entry broadly covering parts consumed within the factory for manufacture of specified goods must be construed liberally and purposively. On that reading, conveyors and control panels used in the construction and functioning of boilers fell within Serial No. 18 of Notification No. 205/88-C.E., even though they may also fit separate tariff descriptions. The demand and penalties could not be sustained because the items were treated as covered by the notification.

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Issues: Whether conveyors and control panels used in the manufacture of boilers were covered by serial No. 18 of Notification No. 205/88-C.E. dated 25-5-1988.

Analysis: The entry at serial No. 18 was worded broadly to cover parts consumed within the factory for the manufacture of the specified goods. A boiler is made up of numerous component parts and auxiliary items used in its construction and operation. The notification was to be construed in a manner that gave effect to its wide language, and not in a narrow or restrictive sense. Conveyors and control panels, being used in the construction and functioning of boilers, fell within the scope of the entry even though they may answer separate tariff descriptions.

Conclusion: The conveyors and control panels were covered by the notification and the duty demands and penalties could not be sustained.

Ratio Decidendi: Where an exemption entry is deliberately broadly worded to cover parts used in the manufacture of specified goods, it must receive a liberal and purposive construction so as to include all items used in the construction of the goods, unless expressly excluded.

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