Exemption notification capital limit applies only to machinery used for the exempted goods, not the entire factory complex.

An exemption notification for goods under Item 68 limited eligibility by reference to the capital investment on plant and machinery installed in the industrial unit manufacturing the exempted goods. The relevant investment had to be computed only with reference to the machinery used for the specified goods, not by aggregating machinery used for other products in the same factory complex. On that construction, machinery used for butter, skimmed milk powder and other non-covered products was irrelevant, and the exemption remained available for liquid nitrogen manufactured in the covered unit.

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Issues: Whether, under Notification No. 105/80-C.E. dated 19-6-1980 issued under Rule 8(1) of the Central Excise Rules, 1944, the capital investment limit of rupees ten lakhs had to be computed with reference only to the plant and machinery installed for manufacturing the exempted "said goods" falling under Item No. 68, or by aggregating the value of all plant and machinery in the industrial complex manufacturing other goods as well.

Analysis: The notification exempted first clearances of goods falling under Item No. 68 and, by its own language, treated those goods as the "said goods". The proviso required satisfaction that the sum total of the capital investment on plant and machinery installed in the industrial unit in which the said goods under clearance are manufactured did not exceed rupees ten lakhs. Since the goods under consideration were liquid nitrogen, which itself fell under Item No. 68, the relevant investment was only that referable to the plant and machinery used for manufacturing liquid nitrogen. Plant and machinery used for butter, skimmed milk powder and other non-covered products had no relevance. The Tribunal's view, based on the distinction between "factory" and "industrial unit" and the plain wording of the notification, was correct.

Conclusion: The capital investment limit had to be applied only to the plant and machinery used for manufacturing the exempted goods under Item No. 68, and not to the entire factory's machinery. The appeal failed and the exemption was admissible to the assessee.

Ratio Decidendi: Where an exemption notification expressly limits eligibility by reference to the capital investment on plant and machinery used for manufacturing the specified exempted goods, the relevant investment is confined to that separate manufacturing unit and cannot be expanded to include machinery used for other goods merely because they are produced in the same factory complex.

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