Exemption for earthquake relief goods extended to clinker used in making cement cleared for relief purposes.

An exemption notification for goods donated or purchased for earthquake relief was construed to cover excisable goods used in the relief chain where the statutory language and relief purpose were satisfied. On that reading, clinker consumed within the factory to manufacture cement later cleared for earthquake relief was treated as eligible for the benefit because the final product fell within the notified relief use and the intermediate product formed part of that process. The demand was therefore not sustainable, and the exemption extended to the clinker used in manufacturing the relief cement.

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Issues: Whether clinker used within the factory for manufacture of cement cleared for earthquake relief was entitled to exemption under Notification No. 128/94.

Analysis: The exemption notification was read as extending to all excisable goods falling under the Central Excise Tariff Act, 1985 when donated or purchased for relief and rehabilitation of earthquake-affected persons. The clinker was manufactured and utilised in the manufacture of cement that was itself cleared for the specified relief work, and the notification was construed not only strictly but also reasonably in light of its language and object. The fact that the relief-oriented exemption covered the cement also supported extension of the benefit to the clinker used in its manufacture.

Conclusion: The clinker qualified for exemption under Notification No. 128/94, and the demand was not sustainable.

Final Conclusion: The appeal succeeded and the exemption benefit was extended to the clinker used in the manufacture of cement cleared for earthquake relief.

Ratio Decidendi: An exemption notification intended for relief and rehabilitation must be construed strictly but reasonably according to its language and object, and it can extend to an intermediate product used in the manufacture of the exempted final product when the notification covers the goods and the relief purpose is satisfied.

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