Strict construction of exemption notifications: goods made in EOU premises qualified for duty exemption, even when third-party manufactured.

An exemption notification for goods produced or manufactured in a 100% export-oriented undertaking was construed according to its plain wording, which covered excisable goods manufactured in the undertaking's premises without limiting the benefit to goods made only by the undertaking itself. The text did not permit adding restrictive words such as "by" into the notification, and the exemption therefore applied even where a third party manufactured the goods on the EOU premises. On that construction, the duty demand could not stand and the penalty was not justified.

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Issues: Whether Notification No.125/84-C.E. dated 26.05.1984 exempted excisable goods manufactured in a 100% export-oriented undertaking even where the goods were manufactured by a third party in the undertaking's premises, and whether the duty demand and penalty could survive once the exemption was held applicable.

Analysis: The notification exempted all excisable goods produced or manufactured in a hundred per cent export-oriented undertaking from duty under Section 3 of the Central Excises and Salt Act, 1944. The wording did not confine the exemption to goods manufactured "by" the undertaking, and no such expression could be supplied by interpretation. The notification had to be read as drafted, without adding words or importing intendment into a taxing notification. On that construction, goods manufactured in the EOU premises qualified for the exemption, irrespective of whether the actual manufacturer was the EOU itself or another person engaged by it.

Conclusion: The exemption under Notification No.125/84-C.E. was available; the duty demand did not survive and penalty was not justified.

Ratio Decidendi: An exemption notification in a taxing statute must be construed strictly according to its plain language, and courts cannot add words such as "by" to restrict the scope of exemption beyond what the notification expressly provides.

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