Interpretation of "during the preceding year" in exemption notifications allows prior partial availing to satisfy eligibility conditions.

A small-scale industry exemption under Notification No. 175/86 was interpreted to require prior availing of the benefit only for some period within the preceding year, not for the whole financial year. The Tribunal rejected a restrictive reading of the word "during" and held that it covers any part of that year unless the notification expressly demands continuous or full-year availing. On that construction, partial exemption use in 1988-89 satisfied the eligibility condition for 1989-90, making the denial of exemption unsustainable.

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Issues: Whether the assessee was entitled to small-scale industry exemption under Notification No. 175/86 for 1989-90 despite having availed the exemption only for part of the preceding financial year.

Analysis: The condition in the notification requiring the assessee to have availed of the exemption "during the preceding year" was interpreted by the Tribunal. The restrictive reading that the benefit must have been enjoyed throughout the entire preceding financial year was rejected. The word "during" was held to bear a broader meaning, including "at some period in", and the assessee's partial availing of the exemption in the preceding year satisfied the requirement. Since the assessee had availed the exemption during part of 1988-89, the eligibility condition for the subsequent year was met.

Conclusion: The assessee was eligible for the exemption for 1989-90, and the denial of the benefit was unsustainable.

Ratio Decidendi: Where an exemption notification requires prior availing of a benefit "during" a preceding year, the condition is satisfied if the benefit was availed for any period within that year, unless the notification expressly requires continuous or full-year availing.

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