Statutory excise exemption for new industrial units cannot be curtailed by administrative clarification or later anomaly removal.

A new industrial unit in the notified area was stated to fall within the excise exemption under Notification No. 50/2003 because Clause 3.1 of the New Industrial Policy, 2003 extended the benefit to units commencing commercial production on or after 07.01.2003. The notification was read on its terms: Category "C" of Annexure-II did not confine the exemption to existing units, and the reference to "to be notified alongwith extension" was treated as a typographical anomaly. The later Notification No. 27/2005 was described as removing anomalies only, while SIDCUL's clarification could not override the statutory notification. The exemption was therefore held to remain available under the earlier notification.

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Issues: Whether the petitioner's new industrial unit located at Khasra No. 54, village Behedeki, Tehsil Roorkee, District Haridwar was entitled to central excise exemption under Notification No. 50/2003 dated 10.06.2003, and whether the administrative clarification issued by SIDCUL could restrict that exemption to existing units only.

Analysis: Clause 3.1 of the New Industrial Policy, 2003 and Notification No. 50/2003 granted excise exemption to new industrial units commencing commercial production on or after 07.01.2003 if located in areas specified in Annexure-II. The unit of the petitioner was situated in the area so notified. The description in Category "C" of Annexure-II did not expressly confine the benefit to existing units, and the contrary reading adopted by the respondents was not borne out by the notification. The Court also held that the words "to be notified alongwith extension" reflected a typographical anomaly and did not require a further notification under Section 5A of the Central Excise Act, 1944. The subsequent Notification No. 27/2005 only removed anomalies and did not alter the entitlement that already flowed from the earlier notification. The SIDCUL clarification could not prevail over the terms of the statutory notification.

Conclusion: The petitioner was entitled to the excise exemption under Notification No. 50/2003 dated 10.06.2003, and the order denying exemption was quashed.

Ratio Decidendi: A statutory exemption notification must be given effect according to its terms, and an administrative clarification cannot curtail a benefit expressly available under the notification.

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