Contextual interpretation of exemption notifications: "industrial unit" was read separately from "factory" for unit-wise capital investment computation.

An exemption notification using the expression "industrial unit" distinct from "factory" was interpreted contextually, so capital investment had to be computed unit-wise rather than for the factory as a whole. The notification's earlier reference to clearances from one or more factories did not control the proviso, which deliberately used different language and was applied in line with excise practice and administrative understanding. On that construction, the tribunal's view that the exemption limit turned on the capital investment of each industrial unit was upheld, and the assessee's broader factory-based interpretation failed.

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Issues: Whether, for the purpose of Notification No. 89/79-C.E. dated 1-3-1979, the expression "industrial unit" is to be understood as distinct from a factory so that capital investment is computed unit-wise for the exemption limit.

Analysis: The notification granted exemption subject to satisfaction that the capital investment in plant and machinery installed in the industrial unit did not exceed the prescribed limit. The earlier part of the notification referred to clearances from one or more factories, but the proviso deliberately used the different expression "industrial unit". The expression was therefore not treated as synonymous with a factory. The factual finding that the excise department understood and administered separate parts of a licensed factory as industrial units was accepted, and the tribunal's view that the proviso required unit-wise computation of capital investment was found to be correct.

Conclusion: The expression "industrial unit" was held to bear the meaning understood in excise practice and not to be equated with a factory; the tribunal's interpretation of the notification was upheld, against the assessee.

Final Conclusion: The appeal failed, and the exemption claim was not accepted on the appellant's construction of the notification.

Ratio Decidendi: Where an exemption notification uses a term distinct from "factory", that term must be given its contextual meaning in the scheme and administrative practice of the notification, and the exemption conditions are to be applied accordingly.

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