Liberal construction of exemption notifications upheld for construction goods and factory-made capital goods under the stated wording.

Exemption notifications for cement concrete blocks and capital goods were read liberally where the wording supported the claim. For Notification No. 36/94, goods manufactured at a pre-cast yard for use in construction were treated as covered by the expression "manufactured at the site of construction", so denial of benefit was not justified. For Notification No. 67/95, capital goods manufactured in a factory and used within the factory of production were held to fall within the notification's scope, so denial of exemption was not justified. The stated approach was that a narrow location-based reading should not defeat the intended exemption where the language permits relief.

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Issues: (i) Whether benefit of Notification No. 36/94 was available to cement concrete blocks manufactured at a pre-cast yard away from the main construction site; (ii) Whether benefit of Notification No. 67/95 was available where capital goods were manufactured in the factory and used within the factory of production.

Issue (i): Whether benefit of Notification No. 36/94 was available to cement concrete blocks manufactured at a pre-cast yard away from the main construction site.

Analysis: The exemption was considered in the light of the earlier Tribunal view that the expression "manufactured at the site of construction" in such notifications must receive a liberal construction so that the intended benefit is not defeated by a narrow reading of the location requirement. The site allotted to the contractor for manufacture of goods for use in the construction work was treated as within the scope of the notification.

Conclusion: The denial of benefit under Notification No. 36/94 was not justified and the issue was decided in favour of the assessee.

Issue (ii): Whether benefit of Notification No. 67/95 was available where capital goods were manufactured in the factory and used within the factory of production.

Analysis: The relevant notification extended exemption to capital goods as defined under Rule 57Q of the Central Excise Rules, 1944, manufactured in a factory and used within the factory of production. On that wording, the expression "factory of production" was understood in a manner consistent with the assessee's claim, and no basis was found to deny the exemption.

Conclusion: The denial of benefit under Notification No. 67/95 was not justified and the issue was decided in favour of the assessee.

Final Conclusion: Both exemption claims were upheld, resulting in relief to the assessee on all decided issues.

Ratio Decidendi: Exemption notifications intended to confer benefit on goods used in construction or in factory production must be construed liberally where the wording supports the claim, and a narrow location-based interpretation cannot defeat the intended exemption.

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