Component parts of excluded goods can still qualify for exemption where the notification does not expressly bar them.

Parts and sub-assemblies of nozzles and nozzle holders were treated as distinct excisable goods and not as the excluded finished items themselves. The notification exempted component parts of diesel oil operated internal combustion engines, and the express exclusion of nozzles and nozzle holders was not extended by implication to their parts. The exemption could not be denied by reading words into the notification that were not there, and a component of a component could still qualify as a component of the whole. Eligibility under Notification No. 217/85-C.E. therefore remained available subject to the prescribed conditions.

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Issues: Whether parts and sub-assemblies of nozzles and nozzle holders were entitled to exemption under Notification No. 217/85-C.E. as amended, notwithstanding that nozzles and nozzle holders themselves were expressly excluded from the notification.

Analysis: The majority held that the notification exempted component parts of diesel oil operated internal combustion engines except specified excluded items, including nozzles and nozzle holders. It reasoned that parts of nozzles and nozzle holders are distinct excisable goods and cannot be equated with completed nozzles and nozzle holders merely because they are used in their manufacture. The absence of any express stipulation extending the exclusion to parts of the excluded items meant that such parts remained within the general description of exempt component parts, subject to fulfilment of the notification conditions. The majority relied on the principle that a component of a component can be regarded as a component of the whole, and held that the exemption could not be denied by reading into the notification words that were not there.

Conclusion: Parts and sub-assemblies of nozzles and nozzle holders were held to be eligible for the benefit of Notification No. 217/85-C.E., subject to fulfilment of the prescribed conditions, and the assessee succeeded on this issue.

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