Exemption notification construed as a whole: benefit confined to goods and factories covered by the operative linked notifications.

Notification No. 185/86-C.E. was construed as a whole, with Annexure I describing goods under erstwhile Tariff Item 68 and Annexure II providing the operative limitation. The exemption was held to apply only to goods manufactured in factories covered by the notifications listed in Annexure II, because the linked notifications formed part of the operative text and could not be treated as surplusage. The broader reading that extended the benefit to all Tariff Item 68 goods was rejected, and the refund claim based on that reading could not be sustained.

---

---

Issues: Whether Notification No. 185/86-C.E. granted exemption to all goods falling under erstwhile Tariff Item 68, or whether the benefit was confined to goods manufactured in factories covered by the notifications listed in Annexure II.

Analysis: The notification had to be read as a whole. Although Annexure I described the goods falling under erstwhile Tariff Item 68, the operative portion of the notification made the exemption available only to goods covered by the notifications specified in Annexure II. Those notifications related to specified categories of factories and could not be treated as irrelevant. Annexure I and Annexure II were therefore required to be read together, and the exemption could not be extended beyond the class of goods and factories covered by the linked notifications.

Conclusion: The exemption was restricted to goods manufactured in the factories covered by the notifications mentioned in Annexure II, and the broader interpretation adopted below was unsustainable. The issue was decided in favour of the Revenue.

Final Conclusion: The revenue appeal succeeded, and the assessee's refund claim could not be sustained on the wider reading of the notification.

Ratio Decidendi: Where an exemption notification contains both a general description and a restrictive operative reference to specified linked notifications, the notification must be construed as a whole and the exemption confined to the class expressly covered by the operative linkage.

---