Strict construction of exemption notifications denied PSC pole exemption where State undertaking was not a State department.

Exemption notifications must be strictly construed, and both cumulative conditions in Notification No. 74/93-C.E. had to be satisfied for PSC poles to qualify. A State Government undertaking was not itself a department of the State Government, so the manufacture and intended-use requirements were not met. The benefit of exemption was therefore unavailable, and the denial of the exemption was sustained.

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Issues: Whether the appellant was entitled to exemption under Notification No. 74/93-C.E. dated 28.02.1993 for PSC poles manufactured by a State Government undertaking, and whether the notification conditions requiring manufacture by a factory belonging to a State Government and intended use by a department of that Government were satisfied.

Analysis: The exemption notification prescribed two cumulative conditions. The appellant was only a State Government undertaking and not a department of the State Government. The intended user of the goods was therefore not a department of the State Government, and the statutory conditions of the notification were not met. The Tribunal followed the settled view that exemption notifications must be strictly construed and that both conditions must be satisfied before the benefit can be granted.

Conclusion: The appellant was not entitled to the exemption, and the demand to deny the benefit was sustained.

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