Plain language of exemption notifications governs waste and scrap clearance; conditional benefit denied where other excisable goods are also manufactured.

Waste and scrap cleared from a factory was held not to qualify for exemption under Notification No. 89/95-CE where the same factory also manufactured other excisable goods, because the notification's plain terms confined the benefit to factories not producing such goods. The demand was therefore sustained. Penalty was also maintained since the manufacturer had been repeatedly cautioned, yet kept no records and did not follow excise procedure; the argument that the issue was only one of interpretation was rejected because the notification was found clear and unambiguous.

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Issues: (i) whether waste and scrap arising during manufacture were eligible for exemption under Notification No. 89/95-CE when the factory also manufactured dutiable goods, and (ii) whether penalty was sustainable.

Issue (i): whether waste and scrap arising during manufacture were eligible for exemption under Notification No. 89/95-CE when the factory also manufactured dutiable goods.

Analysis: The exemption for waste, parings and scrap under Notification No. 89/95-CE was subject to the condition that it would not apply to waste and scrap cleared from a factory in which any other excisable goods other than exempted goods were also manufactured. The factory admittedly manufactured both exempted railway wagons and dutiable railway wagons. The notification was held to be clear and unambiguous, and its wording could not be expanded by reading into it a concept that the factory manufactured exempted goods only during the disputed period.

Conclusion: The exemption was not available and the demand was sustainable.

Issue (ii): whether penalty was sustainable.

Analysis: The penalty was upheld because the appellants had been repeatedly cautioned by the department but still maintained no records and did not follow the required excise procedures. The contention that the matter involved only interpretation of the notification was rejected, as the notification was found to be plain and unambiguous.

Conclusion: The penalty was rightly imposed and maintained.

Final Conclusion: The orders of the lower authorities were sustained and the appeals failed in entirety.

Ratio Decidendi: An exemption notification must be applied according to its plain language, and where the factory manufactures both exempted and other excisable goods, a conditional exemption for waste and scrap cannot be extended beyond the express terms of the notification.

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