Strict construction of exemption notifications bars withdrawal of a duty-payment option once exercised during the financial year.

An exemption notification must be strictly construed, and the assessee bears the burden of proving full compliance with its conditions. Where the assessee had paid duty on clearances during the relevant financial year, it was taken to have exercised the option to pay duty at the normal rate, and that option could not be withdrawn for the remainder of that year. On the facts, the assessee failed to establish eligibility for Notification No. 8/98-Central Excise dated 02.06.1998, so the denial of exemption was upheld and the duty demand and consequential reliefs sustained.

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Issues: Whether the assessee was entitled to exemption under Notification No. 8/98-Central Excise dated 02.06.1998, and whether the benefit could be denied on the ground that the assessee had exercised an option to pay duty at the normal rate for the remaining part of the financial year.

Analysis: The exemption notification had to be construed strictly, and the burden lay on the assessee to establish that it satisfied the prescribed conditions. The adjudicating authority and the appellate tribunal had examined the material and found that the assessee had paid duty on certain clearances during the relevant financial year, thereby exercising the option to pay duty at the normal rate. Under the notification, once such option was exercised, it could not be withdrawn for the remaining part of the financial year. The assessee failed to show that it satisfied the conditions for availing the exemption.

Conclusion: The assessee was not entitled to the benefit of Notification No. 8/98-Central Excise dated 02.06.1998, and the denial of exemption was upheld.

Final Conclusion: The dismissal of the appeal left intact the finding that the assessee could not claim the exemption and that the duty demand and consequential reliefs sustained by the authorities were valid.

Ratio Decidendi: An exemption notification must be strictly interpreted, the assessee bears the burden of proving eligibility, and any ambiguity or failure to satisfy the notified conditions disentitles the assessee from the exemption.

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