Exemption notification construed strictly: no implied continuous-existence , and incentive rebate remained available under the production formula.

An exemption notification must be construed according to its text, and no disqualifying condition can be implied where it is not expressed. Clause 5 of Notification No. 108/78 required comparison of 1977-78 production with the average of the preceding three sugar years; if production in any earlier year was nil, that year was to be ignored in the average. The factory's non-existence during all three preceding years did not by itself defeat the rebate claim, because reading in a continuous-existence requirement would create an unreasonable and anomalous result. The suggested bar under clause 6 was unsupported, so the assessee remained entitled to the incentive rebate.

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Issues: Whether the assessee was entitled to incentive rebate under Notification No. 108/78 despite the factory not having been in existence during all the three preceding sugar years and despite the revenue's reliance on clauses 5 and 6 of the notification.

Analysis: Clause 5 did not expressly impose a condition that the factory must have been in existence during all the preceding three sugar years. It only required comparison of the 1977-78 production with the average production of the preceding three sugar years, and where production in any preceding year was nil, that year had to be ignored while computing the average. Reading an implied requirement of continuous existence into the notification would produce an unreasonable and anomalous result, because a factory with nil production in a year would be treated differently from a factory not then in existence, even though the practical effect was the same. The asserted bar under clause 6 was also not substantiated by any supporting particulars.

Conclusion: The assessee was entitled to the rebate, and the review notice could not be sustained.

Final Conclusion: The appellate order granting relief to the assessee was upheld and the departmental challenge failed.

Ratio Decidendi: An exemption notification must not be construed to insert a disqualifying condition that is not expressed in its text, especially where such a reading would lead to absurd or unreasonable results.

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