Strict construction of exemption notifications barred Heading 9806 relief where a specific exclusion notification applied.

Goods falling within a notification covering parts of general application were excluded from Heading 9806 by Chapter Note 7(d) to Chapter 98, which removes notified items from that heading. Because the goods were covered by Notification No. 132/87, the exemption under Notification No. 69/87 could not be extended by harmoniously reading the two notifications. Exemption notifications must be construed strictly, and the specific exclusion prevailed over any broader claim to classification relief. The result was that the goods were not classifiable under Heading 9806 and the assessee was denied the benefit of Notification No. 69/87.

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Issues: Whether the goods were classifiable under Heading 9806 and entitled to the benefit of Notification No. 69/87, notwithstanding their exclusion under Notification No. 132/87.

Analysis: Chapter Note 7(d) to Chapter 98 excludes from Heading 9806 any other part of machinery which, having regard to its nature as a part of general application, is notified by the Central Government. The goods in question fell within the notified goods covered by Notification No. 132/87. The benefit of Notification No. 69/87 could not be extended by reading the two notifications harmoniously, because exemption notifications must be construed strictly and the specific exclusion under Notification No. 132/87 prevailed.

Conclusion: The goods were not classifiable under Heading 9806 and the benefit of Notification No. 69/87 was rightly denied to the assessee, in favour of Revenue.

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