Exemption notification interpretation: Item No. 2 covered all goods outside Item No. 1, with later clarification treated as declaratory.

Item No. 2 of Notification No. 12 of 1989 was construed to cover all goods not falling within Item No. 1, rather than being limited to goods other than hardened technical oil (inedible grade). The Supreme Court treated the notification as a whole and held that the later notification dated 20.03.1990 was clarificatory of the original position, not a fresh substantive enlargement of the exemption. On that interpretation, the assessee was entitled to the benefit of Item No. 2.

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Issues: Whether Item No. 2 of Notification No. 12 of 1989 covered all goods other than those specified in Item No. 1, or was confined only to goods other than hardened technical oil (inedible grade).

Analysis: The dispute turned on the construction of the exemption notification. The Tribunal had construed Item No. 2 narrowly to exclude edible oil. The Court held that the proper reading of the notification was that Item No. 2 embraced all goods not falling under Item No. 1. The later notification issued on 20.03.1990 was treated as clarificatory of the original position and not as introducing a new substantive meaning.

Conclusion: Item No. 2 of Notification No. 12 of 1989 applied to all goods other than those in Item No. 1, and the subsequent notification was merely clarificatory. The assessee succeeded.

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