Exemption notification for scheduled industries cannot be denied merely because the refining process lacks milling or solvent extraction.

An exemption under Notification No. 115/75-CE applies where the factory belongs to a scheduled industry, such as an oil mill and solvent extraction industry, rather than depending on whether each manufacturing step independently involves milling or solvent extraction. The department's objection based on the refining process was therefore not decisive, because the notification did not condition relief on the presence of that process in the individual activity under scrutiny. On that basis, the assessee was held entitled to the exemption, and the demand and penalty were not sustainable.

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Issues: Whether the assessee was entitled to exemption under Notification No. 115/75-CE dated 30.04.1975 merely because it possessed an oil mill and solvent extraction industry, even though the department contended that the refining process undertaken did not involve milling or solvent extraction.

Analysis: The notification granted exemption to goods manufactured in factories covered by the industries specified in its Schedule, and not to goods based on the particular manufacturing process employed in each case. The relevant requirement was therefore the existence of a factory belonging to one of the scheduled industries, including oil mill and solvent extraction industry. The record showed that the assessee possessed such an industry and this was not disputed. The department's objection went only to the refining process and not to the scheduled character of the factory. Since the notification did not make exemption conditional on the presence of a milling process, the departmental reliance on the nature of refining activity was misplaced.

Conclusion: The assessee was entitled to the benefit of the exemption notification, and the demand and penalty could not be sustained.

Final Conclusion: The appeal filed by the Revenue was dismissed and the order granting exemption to the assessee was upheld.

Ratio Decidendi: Where an exemption notification conditions relief on the manufacturer having a factory belonging to a specified industry, the exemption cannot be denied merely because the particular process carried on in that factory does not itself include the process relied upon by the department.

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