Exemption notification interpretation: "or" read as "and" so clearance limits had to be met in both years.

Notification No. 175/86, as amended, was construed as a whole to determine eligibility under proviso 4(a) for a D.G.T.D.-registered unit. The proviso extended exemption only where the unit's clearances remained within the prescribed limit in both the preceding financial year and the current year. Although the text used the word "or", it was read as "and" to avoid rendering part of the proviso redundant and to preserve coherence with the scheme of the notification. On that construction, the exemption was available only if both clearance conditions were satisfied, and the unit was held ineligible for the benefit.

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Issues: Whether, under proviso 4(a) to Notification No. 175/86 as amended by Notification No. 244/87, the exemption was available to a D.G.T.D.-registered unit on the basis that either the preceding financial year's clearances or the current financial year's clearances did not exceed Rs. 7.5 lakhs, or whether both conditions had to be satisfied.

Analysis: The notification was construed as a whole. The main exemption applied to units registered as small scale industries, while the proviso extended the benefit to certain unregistered units subject to the clearance limit. The wording of proviso 4(a) used the conjunction "or" between the preceding financial year and the current financial year, but the context showed that the provision was intended to preserve the exemption only where the unit's clearances remained within the prescribed limit both in the preceding year and in the current year. The construction suggested by the appellant would make part of the proviso redundant, which was not permissible. The word "or" was therefore read as "and" so that the entire proviso would operate coherently.

Conclusion: The exemption was available only if the clearances in the preceding financial year had not exceeded Rs. 7.5 lakhs and the current financial year's clearances were also not likely to exceed Rs. 7.5 lakhs. The appellant was not eligible for the benefit.

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