Exemption notification conditions must be read cumulatively; credit was denied because clearances were required in all three base years.

Clause (iv)(b) of the excise exemption notification required actual clearances in each of the three specified financial years, because the word "and" was used in its ordinary cumulative sense and the scheme, Budget speech, and explanatory note showed that the concession was confined to factories with clearances during the base period. The condition was therefore mandatory, and a factory with clearances in only one year did not qualify for credit under Rule 56AA. The rejection of the claim was upheld.

---

---

Issues: Whether clause (iv)(b) of the excise exemption notifications required a factory to have effected clearances of the specified goods in each of the three relevant financial years, or whether clearances in only one of those years was sufficient for entitlement to credit under Rule 56AA.

Analysis: The notifications granted credit on excess production subject to the conditions in the notification itself. Clause (iv) used the disjunctive expression in sub-clause (a) and the cumulative expression in sub-clause (b), stating that no credit shall be allowed where clearances were not effected during the three specified financial years. The scheme, the Budget speech, and the explanatory note showed that the concession was intended for factories which had actual clearances during the prescribed base period. The expression "and" in the clause was read in its ordinary cumulative sense, and there was no basis to read it as "or". The interpretation advanced by the assessee would conflict with the text and object of the scheme.

Conclusion: The condition in clause (iv)(b) was mandatory and required clearances in all three specified financial years. The assessee was not entitled to the credit, and the rejection of the claims was upheld.

Ratio Decidendi: Where the language of an exemption notification is clear, the word "and" must be given its cumulative meaning, and the notification must be construed in the light of its object and contemporaneous exposition without rewriting the condition in favour of the claimant.

---