Strict construction of exemption notifications: fuel used to generate steam was not "feed-stock" and no relief followed.

An exemption notification granting relief only for goods used as "feed-stock" was interpreted strictly, with the term confined to its ordinary technical meaning as raw material delivered to a machine for processing. Low sulphur heavy stock used only to generate steam in fertiliser manufacture did not satisfy that condition and therefore did not qualify for exemption. The Tribunal rejected reliance on an earlier petroleum products ruling, holding that the notification in question was materially different and that general principles about inputs in an integrated manufacturing process could not override the specific wording of the exemption. The stricter construction meant the exemption was unavailable and the adverse demand-based order was sustained.

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Issues: Whether low sulphur heavy stock used for generation of steam in the manufacture of fertilisers was eligible for exemption as feed-stock under Notification No. 75/84-C.E. dated 1-3-1984 as amended, and whether the contrary line of reasoning required reference to a larger Bench.

Analysis: The exemption was construed according to the language of the notification. The term "feed-stock" was treated consistently with earlier Tribunal decisions as referring to raw material delivered to a machine for processing. Notification No. 75/84-C.E. was materially different from the notification considered in the earlier petroleum products case, so that decision was held irrelevant. The Court also held that general principles concerning inputs in an integrated manufacturing process could not override the specific condition in the exemption notification requiring use as feed-stock. Exemption notifications in taxing statutes are to be interpreted strictly, with no scope for intendment.

Conclusion: Low sulphur heavy stock used for generation of steam was not eligible for exemption under the notification, and the plea for reference to a larger Bench was rejected.

Final Conclusion: The appeal failed and the demand-based order against the assessee was sustained.

Ratio Decidendi: Where an exemption notification grants relief only for goods intended for use as feed-stock, the expression must be given its strict and ordinary technical meaning as raw material for processing, and goods used merely to generate steam for manufacture do not qualify.

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