Notification-based excise exemption depends on unit-based interpretation, not isolation of one product division within an integrated company.

Eligibility for exemption under Notification No. 89/79 turned on a fair reading of the notification as a whole, especially the proviso referring to the industrial unit and Tariff Item 68 goods. Although the manufacturing divisions were separate in location and held separate excise licences, they were part of one incorporated company and not distinct legal entities. The Tribunal treated the relevant plant and machinery investment on a unit-based basis within the integrated industrial complex, rather than isolating only the Tariff Item 68 division. On that construction, the exemption was not available and the refund claims were unsustainable.

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Issues: Whether the appellants were entitled to exemption under Notification No. 89/79 dated 1-3-1979 on the footing that the Tariff Item 68 manufacturing division was a separate industrial unit, and whether the existence of common ownership, single company status, and consolidated tax assessments required the plant and machinery investment of the entire industrial complex to be taken into account.

Analysis: The exemption depended on the construction of the notification, particularly the proviso referring to the industrial unit and the goods covered by Tariff Item 68. The Tribunal examined the documentary position and found that the units were separate divisions located at different places and holding separate excise licences, but they were not distinct legal entities and the company was one incorporation. On the language of the notification, the expression used in the proviso supported the view that the relevant unit was not to be isolated merely by the product manufactured when the company remained one industrial complex. The Tribunal accepted the view that the term used in the notification could not be read so as to confine the exemption only to the Tariff Item 68 section of the company when the notification, read as a whole, indicated a broader unit-based computation.

Conclusion: The appellants were not entitled to the claimed exemption and the refund claims were not sustainable.

Ratio Decidendi: Eligibility for a notification-based excise exemption must be determined on a fair reading of the notification as a whole, and where the language points to the industrial unit as part of a larger integrated company structure, the exemption cannot be claimed by treating only one product division as a separate unit in isolation.

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