Exemption notification interpretation: use of non-specified inputs did not defeat relief where the manufacture otherwise fell within the notification.

Exemption under Notification No. 183/88-C.E. was admissible where the notice alleged use of aluminium along with specified zinc inputs, but the adjudicating authority denied relief on a different ground not set out in the notice. The Tribunal applied the principle that exemption cannot be refused merely because non-specified inputs are also used if the notification otherwise covers the manufacture. It also treated the change in the basis of denial from the show cause notice as unsustainable on the record. The benefit of exemption was therefore upheld and the denial of duty relief was found unsustainable.

---

---

Issues: Whether the benefit of exemption from duty under Notification No. 183/88-C.E. dated 13-05-1988 was admissible where the denial of exemption in the adjudication order was based on a ground different from that stated in the show cause notice, and where the final products were manufactured using both specified and non-specified inputs.

Analysis: The notice proposed denial of exemption on the footing that aluminium was also used along with zinc and articles thereof, which were the specified inputs under the notification. The adjudicating authority, however, denied the benefit on a different basis, namely that the final product falling under Chapter Heading 79.01 was not unwrought zinc covered by the notification. The material relied on showed that the presence of aluminium over and above zinc articles was not ative of eligibility, and the Tribunal applied the principle that exemption cannot be denied merely because non-specified inputs were also used where the notification otherwise covered the manufacture.

Conclusion: The exemption under Notification No. 183/88-C.E. was admissible and the denial of benefit was unsustainable.

---