Cumulative clearance requirement under incentive exemption scheme denied production-based benefit where yearly conditions were not met

An exemption notification granting incentive benefit for higher production was construed as a cumulative scheme requiring clearances before 1 April 1980 and in each of the financial years 1980-81, 1981-82 and 1982-83. The wording was somewhat ambiguous, but a harmonious reading of the base period, condition (iv), and the relevant production years showed that 1980-81 mattered for eligibility under clause (iv) and not for computing the base period. Because the factory did not satisfy the cumulative clearance requirement, it was held not entitled to the incentive benefit.

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Issues: Whether, under the exemption notification governing incentive benefit for higher production, a factory was required to have clearances not only before 1 April 1980 but also in each of the financial years 1980-81, 1981-82 and 1982-83 to qualify for the benefit.

Analysis: The notification was construed as a scheme meant to grant additional benefit for higher production. Condition (iv) was read along with the definition of the base period and the reference to the relevant production years. The wording was considered somewhat ambiguous, but the structure of the notification showed that the year 1980-81 was relevant only for the eligibility condition in clause (iv) and not for computing the base period. On a harmonious reading, the notification contemplated clearances prior to 1 April 1980 and clearances in each of the three financial years 1980-81, 1981-82 and 1982-83.

Conclusion: The requirement was cumulative, and the assessee was not entitled to the incentive benefit.

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