Strict construction of exemption notification limits "industrial unit" to manufacturing premises, excluding staff quarters electricity from relief.

Electricity consumed in staff quarters attached to a factory was held not to fall within the expression "industrial unit" in Notification No. 52/78, because exemption notifications are construed strictly and the phrase was limited to the manufacturing /premises. The absence of any express extension to residential quarters was decisive, so the exemption did not apply. The existence of State notifications granting similar relief for such use did not alter the scope of the Central notification, and the electricity remained chargeable to Central Excise duty.

---

---

Issues: Whether electricity consumed in staff quarters attached to the factory fell within the expression "industrial unit" in Notification No. 52/78 dated 1-3-78 and was therefore eligible for exemption from Central Excise duty.

Analysis: The expression in the exemption notification was construed according to its plain meaning. The term "industrial unit" was held to cover only the manufacturing premises and not the staff quarters in the residential colony attached to the factory. Exemption notifications were treated as requiring strict interpretation, and the absence of an express provision extending the exemption to electricity used in staff quarters was considered decisive. The existence of State notifications granting specific exemptions for similar use did not alter the position under the Central notification.

Conclusion: The electricity consumed in the staff quarters was not covered by Notification No. 52/78 and remained chargeable to Central Excise duty.

---