Statutory excise exemption cannot be narrowed by administrative instructions, while clearance-based relief fails without prior-year production.

An excise exemption tied to clearances in the preceding financial year was unavailable where the assessee had no production, factory existence, or clearances in that year. A separate statutory exemption notification could not be curtailed by a press note or trade notice adding a consumer pass-on condition that did not appear in the notification itself. Administrative directions could not override or nullify the statutory concession, and the assessable value could not be reworked to defeat the exemption. The later notification was therefore operative without the additional condition, while the earlier exemption claim failed.

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Issues: (i) Whether the assessee was entitled to exemption under the notification of 18-1-1974 despite no production or clearance in the preceding financial year. (ii) Whether the benefit under the notification of 16-6-1976 could be denied by a press note and trade notice imposing a condition that the concession must be passed on to consumers.

Issue (i): Whether the assessee was entitled to exemption under the notification of 18-1-1974 despite no production or clearance in the preceding financial year.

Analysis: The notification contemplated exemption by reference to clearances made in the preceding financial year. The assessee commenced production only in December 1976 and had no factory existence or clearance in the relevant previous year. On that construction, the departmental view that the condition of the notification was not satisfied was upheld.

Conclusion: The assessee was not entitled to the benefit of the notification of 18-1-1974.

Issue (ii): Whether the benefit under the notification of 16-6-1976 could be denied by a press note and trade notice imposing a condition that the concession must be passed on to consumers.

Analysis: The notification under Rule 8 was statutory in character, while the press note and trade notice were merely administrative. A concession granted by a statutory notification could not be curtailed by administrative directions, and no such pass-on condition was found in the notification itself. The assessable value under section 4 could not be reworked in the manner suggested by the revenue so as to nullify the exemption.

Conclusion: The press note and trade notice were invalid and inoperative, and the assessee was entitled to the benefit of the notification of 16-6-1976 without passing on the rebate to consumers.

Final Conclusion: The writ petition succeeded only to the extent of striking down the administrative restriction on the later exemption and securing refund of amounts recovered on that basis, while the challenge to denial of the earlier exemption failed.

Ratio Decidendi: A statutory excise exemption granted by notification cannot be restricted or conditioned by subsequent administrative instructions unless the notification itself so provides; however, an exemption linked to clearances in the preceding financial year is unavailable where the assessee had no production or clearance in that year.

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