Strict construction of exemption notifications excludes textile cess from customs exemption where the levy is not expressly covered.

An exemption notification under Notification No. 110/95-Cus was construed strictly: it covered customs duty in excess of 15% and additional duty of excise, but did not expressly extend to cess levied under section 5 of the Textile Committees Act, 1963. Because the cess arose under a separate statute and no specific exemption covered it, the exemption could not be implied. The cess was therefore not treated as a component of countervailing duty and remained outside the notification's benefit, with the issue answered against the assessee and in favour of the Revenue.

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Issues: Whether cess levied under section 5 of the Textile Committees Act, 1963 was includable as a component of countervailing duty and therefore exempt under Notification No. 110/95-Cus dated 05.06.1995.

Analysis: The notification granted exemption from customs duty in excess of 15% and from additional duty of excise, but it did not refer to cess payable under the Textile Committees Act, 1963. The levy of cess arose under a separate statutory enactment and, absent a specific notification extending exemption to that levy, the exemption could not be implied. The principle applied was that an exemption notification must be construed strictly and confined to the levy expressly covered by it.

Conclusion: The cess was not exempt and was not shown to be a component of countervailing duty; the answer to the question was against the assessee and in favour of the Revenue.

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