Strict construction of exemption notifications: feeder industry machinery was not covered where the notification applied only to electronic industry use.

An exemption notification conditioned on use in the electronic industry was construed strictly, so it did not extend to a feeder manufacturing unit whose machinery was used only to make laminates later supplied to electronics units. The majority held that the importer itself was not engaged in the specified industry, and the absence of the word "exclusively" did not widen the exemption by implication. The later deletion of the words "used in the Electronic Industry" was treated as a substantive change, not a clarification of the earlier notification. On that view, the imported trimming plant and accessories were not eligible for exemption.

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Issues: Whether the imported trimming plant with accessories was entitled to exemption under Notification No. 118/80-Cus. on the ground that the laminates manufactured with its use were ultimately used in the electronic industry, and whether the subsequent deletion of the expression "used in the Electronic Industry" by later notification could be treated as clarificatory.

Analysis: The majority held that the notification had to be read according to its express language and that exemption was available only where the goods were used in the electronic industry. The appellants were not themselves an electronic industry and their machinery was used in a feeder manufacturing activity, even if the laminates produced were later supplied to electronics units. The absence of the word "exclusively" did not enlarge the exemption to cover a non-electronic industry. The majority also treated the later notification as a substantive change and not a clarification of the earlier exemption, and held that the strict terms of an exemption notification could not be expanded by implication.

Conclusion: The exemption was not admissible to the appellants and the appeals failed.

Dissenting Opinion: The Judicial Member held that the notification did not require the importer to be registered as an electronic industry and that goods manufactured by the appellants were exclusively used in the electronic industry, so the exemption should be extended.

Final Conclusion: The operative view was that the notification did not cover the appellants' imports, because the machinery was used in a non-electronic manufacturing unit and exemption notifications must be applied strictly.

Ratio Decidendi: An exemption notification conditioned on use in a specified industry cannot be extended to a feeder industry merely because its products are later used by that specified industry; the notification must be construed strictly according to its terms.

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