Plain wording of exemption notifications governs eligibility for EOU goods cleared into the domestic market.

Notification No. 8/97-CE was held applicable to finished goods manufactured by a 100% export oriented unit from raw material supplied by another 100% EOU and cleared in the domestic tariff area under the EXIM Policy 1997-2002. The Court applied the plain wording of the exemption notification and rejected any reading that would add conditions not expressed in the text. It reiterated that exemption notifications must be construed strictly, but once the eligibility conditions are satisfied, full effect must be given to the exemption. The assessee was therefore entitled to Notification No. 8/97-CE and was not confined to Notification No. 2/95-CE.

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Issues: Whether finished goods manufactured by a 100% export oriented unit from raw material supplied by another 100% EOU and cleared in the domestic tariff area under the EXIM Policy 1997-2002 were entitled to the benefit of Notification No. 8/97-CE dated 1.3.1997, or whether the unit was confined to Notification No. 2/95-CE dated 4.1.1995.

Analysis: Notification No. 8/97-CE applied to finished goods, rejects and waste or scrap produced by a 100% EOU or free trade zone unit from raw material produced or manufactured in India and sold in India in accordance with the EXIM Policy. The Tribunal had accepted the assessee's claim under that notification. The Court held that the language of the notification was clear and unambiguous and could not be narrowed by inserting words that the notification did not contain. It reaffirmed that an exemption notification must be construed strictly on its own wording, but once the subject satisfies the eligibility conditions, the exemption should receive its due effect. On that construction, the goods manufactured by the assessee satisfied the terms of Notification No. 8/97-CE, and the Revenue's attempt to treat the raw material as imported in the hands of the purchasing EOU was rejected.

Conclusion: The assessee was entitled to the benefit of Notification No. 8/97-CE dated 1.3.1997 and not confined to Notification No. 2/95-CE dated 4.1.1995.

Final Conclusion: The Revenue's appeals failed, and the Tribunal's order granting relief to the assessee was sustained.

Ratio Decidendi: An exemption notification must be interpreted according to its plain and unambiguous words without adding or subtracting conditions not expressed therein, and once the eligibility conditions are satisfied, the notification must be given full effect.

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