Plain-language construction of exemption notifications: composite containers may still qualify, but eligible relief must be factually proved.

An exemption notification must be construed on its plain language, and benefit for cartons, boxes, containers and cases made with duty-paid base paper or base paperboard cannot be confined only to goods manufactured exclusively from that input. The presence of other inputs does not by itself defeat exemption, and the proviso operates only where Modvat credit was taken on the relevant base material. At the same time, the assessee must establish the extent of eligible relief, and the factual question whether the qualifying base paper was actually used remained unresolved for determination below.

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Issues: Whether Notification No. 67/82-C.E. allowed exemption for composite containers manufactured with base paper together with other inputs, or whether the benefit was confined only to containers made exclusively from base paper or base paperboard.

Analysis: The notification granted exemption to cartons, boxes, containers and cases in Chapter 48 subject to the condition that duty had already been paid on the base paper or base paperboard used in their manufacture. The eligibility clause had to be read according to the language used, and the proviso barred the benefit only where Modvat credit was availed in respect of the relevant base paper or base paperboard. The Court held that nothing in the notification required the containers to be manufactured solely or purely from base paper or paperboard. The exemption could not be narrowed by adding words such as "only out of" or "purely out of". At the same time, the assessee was not entitled to exemption for the entire container without proof of the extent to which duty had been paid on the qualifying material, and the factual question whether three layers of base paper had in fact been used had not been determined below.

Conclusion: The notification was construed in favour of the assessee to the extent that the presence of other inputs did not by itself defeat the exemption, but the matter was remitted for factual determination of the eligible extent of relief.

Ratio Decidendi: An exemption notification must be construed according to its plain language, and where the eligibility condition is satisfied, the benefit cannot be denied by reading into the notification a requirement that the goods be made exclusively from the specified input.

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