Exemption rebate computation confined to qualifying vegetable product only, with slab-wise concession applied separately and non-qualifying output excluded.

An exemption notification governing rebate on vegetable product required the concession to be computed by applying each slab rate separately and then aggregating the results. The concession base was therefore limited to the quantity of vegetable product manufactured with cotton seed oil, and not to the total factory clearances. Vegetable product made without cotton seed oil was excluded from the concession computation because it did not satisfy the qualifying condition under the notification. The operative effect was that only qualifying goods could be counted for rebate, consistent with the slab-wise computation method in the notification and related earlier notifications.

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Issues: Whether, for the purpose of concession or rebate under the relevant exemption notification, the quantum of concession had to be computed on the total clearances of vegetable product from the factory during the period, or only on the quantity of vegetable product manufactured with cotton seed oil.

Analysis: The concession was held to be governed by Notification No. 23/75 dated 1 March 1975, read with the earlier notifications on the same subject. The controlling proviso required that the quantum of concession available under each serial number representing the slab rates be computed separately and then totalled. This indicated that the concession was not to be calculated on the entire production irrespective of composition, but only on the relevant quantity qualifying under the notification. Vegetable product manufactured without use of cotton seed oil could not be treated as qualifying for the concession.

Conclusion: The computation had to be confined to vegetable product manufactured with cotton seed oil, and exclusion of non-qualifying production from the concession base was upheld in favour of the assessee.

Ratio Decidendi: Where an exemption notification directs separate computation and aggregation of slab-wise concession, the concession must be restricted to the qualifying goods alone and cannot be based on total clearances including non-qualifying goods.

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