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Issues: Whether furnace oil used as fuel in boilers of a 100% export-oriented undertaking qualified as a "consumable" under Entry 7 of Annexure-I to Notification No. 1/95-C.E. and was therefore eligible for duty exemption for the relevant period.
Analysis: The relevant exemption notification separately specified different goods in Annexure-I, and each entry had to be construed independently. Entry 3C dealt specifically with furnace oil required for boilers in textile units during the relevant period, while Entry 7 continued to cover "consumables" for all 100% EOUs. Furnace oil was used in the boilers to generate steam, which was in turn used in the manufacture of export goods. As the term "consumable" was not defined in the notification or the Act, it was construed in its ordinary sense as a commodity eventually used up. Applying a liberal interpretation to an exemption notification once the assessee otherwise satisfied the substantive conditions, furnace oil used in the boilers fell within Entry 7.
Conclusion: The furnace oil was a consumable and was exempt from Central Excise duty under Entry 7 of Annexure-I to Notification No. 1/95-C.E. for the relevant period.
Ratio Decidendi: Where an assessee satisfies the substantive conditions of an exemption notification, undefined terms in the notification must be given their ordinary meaning and construed liberally, and a specific entry governing all eligible units may prevail over a narrower entry dealing with a different class of units.
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