Strict construction of exemption notifications preserves concessional duty where polymerisation of monomers is outside the stated exclusion.

A fiscal exemption notification must be applied strictly on its plain wording, and its scope cannot be enlarged by substituting different expressions. On the stated facts, the exclusion in Notification No. 85/95-C.E. applied only to manufacture by polymerisation of organic polymers or chemical transformation of natural organic polymers; polymerisation of monomers was not covered. The assessee was therefore entitled to concessional duty, and the demand based on denial of the notification was unsustainable. The accompanying allegation of fraud or misdeclaration also failed because the classification disclosure correctly reflected the manufacturing process and no contrary finding was successfully challenged.

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Issues: (i) Whether acrylic staple fibre waste was eligible for concessional duty under Notification No. 85/95-C.E. when the manufacture involved polymerisation of monomers and not polymerisation of organic polymers. (ii) Whether the allegation of fraudulent availment and misdeclaration survived.

Issue (i): Whether acrylic staple fibre waste was eligible for concessional duty under Notification No. 85/95-C.E. when the manufacture involved polymerisation of monomers and not polymerisation of organic polymers.

Analysis: The notification denied exemption only to units manufacturing man-made staple fibre and filament yarn by polymerisation of organic polymers or by chemical transformation of natural organic polymers. The Revenue sought to substitute the words used in the notification and extend the exclusion to polymerisation of monomers. The applicable principle was strict construction of exemption notifications in fiscal statutes, with the language actually used controlling the scope of the exemption. Since the process found on record was polymerisation of monomers and not polymerisation of organic polymers, the exclusion clause did not apply.

Conclusion: The assessee was entitled to the benefit of Notification No. 85/95-C.E. and the duty demand based on denial of the notification was unsustainable.

Issue (ii): Whether the allegation of fraudulent availment and misdeclaration survived.

Analysis: The classification list disclosed that the assessee was not polymerising organic polymers, and the Revenue did not successfully challenge the finding that no incorrect declaration had been made to the Department. In the absence of a contrary challenge to that finding, the allegation of fraud or misdeclaration could not be sustained.

Conclusion: The finding rejecting fraud and misdeclaration was upheld.

Final Conclusion: The order granting concessional duty and rejecting the demand, interest, and penalty was sustained, and the Revenue's appeal failed.

Ratio Decidendi: An exemption notification in a taxing statute must be construed strictly on its plain language, and its scope cannot be enlarged by substituting words or by importing supposed legislative intent.

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