Exemption valuation of plant and machinery may follow a general circular when the notification leaves the term undefined.

An exemption notification linked eligibility to capital investment in plant and machinery not exceeding Rs. 20 lakhs, but did not define that expression. A general administrative circular clarifying the scope of "plant and machinery" was treated as relevant guidance for computing the investment limit, even though it was not issued with reference to the exact notification. On that basis, the generating set and moulds were excluded from the computation, and the assessee remained entitled to the exemption benefit.

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Issues: Whether, for the purpose of Notification No. 105/80-C.E. as amended, the value of a generating set and moulds was to be excluded while computing the capital investment in plant and machinery, and whether the Board's circular could be applied to the exemption claim.

Analysis: The notification conditioned exemption on the capital investment in plant and machinery not exceeding Rs. 20 lakhs, but it did not define the expression "plant and machinery". In that situation, the Board's circular was treated as a relevant clarification of the intended scope of the expression. Although the circular had not been issued with reference to the exact notification, it was couched in general terms and therefore was considered applicable. On that basis, the exclusion of the generating set and moulds from the computation was upheld.

Conclusion: The exclusion of the generating set and moulds from the value of plant and machinery was ly allowed, and the assessee remained entitled to the notification benefit.

Final Conclusion: The Revenue's challenge failed, and the exemption eligibility of the assessee was maintained.

Ratio Decidendi: Where an exemption notification uses the expression "plant and machinery" without defining it, a general administrative circular clarifying that expression may validly guide its computation for exemption purposes, including the exclusion of items covered by the clarification.

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