Exemption interpretation favours assessee where manufacturing activity continued and the factory could not be treated as closed.

For Notification No. 150/83, the expressions "factory" and "closed" were not defined, so they were read with the parent excise law and their ordinary meaning, with any ambiguity in the exemption construed in favour of the assessee. The record showed continuing manufacturing-related activity, including work in the components section, receipt of raw materials, visitor movement, electricity use, and supporting documents. On that basis, the factory could not be treated as wholly closed merely because production of the specified finished goods had slowed or stopped, and the refund claim had to be reconsidered on that footing.

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Issues: Whether, for the purpose of Notification No. 150/83 dated 13-5-1983, the factory could be treated as having remained closed during the relevant period so as to deny relief under the higher production incentive scheme.

Analysis: The notification did not define the expressions "factory" or "closed". In that situation, the meaning had to be gathered from the parent excise law and from the ordinary sense of the words, while keeping in view that ambiguity in a fiscal exemption provision is resolved in favour of the assessee. The record indicated that manufacturing-related activity continued in the factory, including work in the components section, receipt of raw materials, visitor movement, electricity consumption, and supporting records showing that the establishment had not wholly ceased functioning. On that basis, the conclusion that the factory was closed merely because production of the specified finished goods had slowed or stopped was not justified.

Conclusion: The factory could not be treated as closed for the purpose of the notification, and the assessee was entitled to have the refund claim reconsidered on that footing.

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