Plain-language interpretation of exemption notification excludes duty-free tractor clearances from base-clearance computation.

Goods cleared without payment of duty under a Board exemption order were held outside the base-clearance computation under Notification No. 198/76-C.E. The notification excluded clearances of goods exempted from the whole of the duty leviable thereon, and its language did not distinguish between exemptions granted under Rule 8(1) and Rule 8(2). Applying the provision in its plain terms, the tribunal treated tractors covered by the exemption order as not includible in base clearances, and the assessee's claim was accepted.

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Issues: Whether tractors cleared under an exemption order issued under Rule 8(2) of the Central Excise Rules were to be excluded while computing base clearances under Notification No. 198/76-C.E.

Analysis: The notification directed that clearances of specified goods exempted from the whole of the duty leviable thereon were not to be taken into account in computing base clearances. It did not draw any distinction between exemption granted under Rule 8(1) and exemption granted under Rule 8(2). Since the tractors were cleared without payment of duty under the Board's exemption order, the notification applied according to its plain terms and no artificial distinction could be introduced between the two modes of exemption.

Conclusion: The tractors cleared under the Board's exemption order were not includible in base clearances, and the assessee's claim was accepted.

Final Conclusion: The appeal failed and the order in favour of the assessee was sustained.

Ratio Decidendi: An exemption notification must be applied according to its plain language, and where it excludes goods exempted from the whole of the duty leviable thereon, no distinction can be read in between exemptions granted under different sub-rules if the goods were in fact cleared without payment of duty.

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