Exemption for scrap from exempted goods depends on actual manufacture during the relevant period, not future intent.

Notification No. 89/95-C.E. exempted waste, parings and scrap arising in the manufacture of exempted goods, and its proviso withdrew that benefit only where the factory also manufactured other excisable goods during the relevant period. The actual manufacturing position, not a future intention to produce dutiable goods, was decisive. Because the assessee manufactured only exempted goods in the relevant period and no other excisable goods, the proviso could not be stretched beyond its wording to deny exemption. The exemption therefore remained available for that period, and the Revenue's challenge failed.

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Issues: Whether the benefit of Notification No. 89/95-C.E. could be denied merely because the assessee intended to manufacture dutiable goods in future, when no other excisable goods were manufactured during the relevant period.

Analysis: The notification exempted waste, parings and scrap arising in the course of manufacture of exempted goods, but its proviso withdrew the exemption only where such scrap was cleared from a factory in which other excisable goods, apart from exempted goods, were also manufactured. The decisive factor was the actual position during the relevant period. Since the assessee manufactured only exempted goods in that period and had not manufactured any other excisable goods, the mere future intention to manufacture dutiable goods could not be imported into the notification to defeat the exemption. The notification had to be applied according to its wording, and the proviso could not be expanded beyond its terms.

Conclusion: The exemption under Notification No. 89/95-C.E. was available to the assessee for the relevant period, and the Revenue's appeal failed.

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