Strict construction of exemption notifications led to allowance of relief where polymerization was not technically established.

An exemption notification for waste of man-made stable fibres and man-made filament yarn was construed strictly, and the benefit could not be denied by expanding its terms to cover PTA and MEG as organic polymers. The assessee's technical certificate supported its position that the prohibited process of polymerization or manufacture of organic polymers was not undertaken, and the department should have obtained its own technical verification before rejecting the claim. The exemption was therefore available, and the revenue's objections failed.

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Issues: Whether the assessees were entitled to exemption under the relevant notifications for waste of man-made stable fibres and man-made filament yarn, and whether the manufacturing process amounted to the prohibited process of polymerization or use of organic polymers.

Analysis: The notification exempted the goods only if the factory did not undertake polymerization or the manufacture of organic polymers. The assessee produced a technical certificate supporting its stand that the prohibited process was not used. The departmental authority enlarged the scope of the notification by treating PTA and MEG as organic polymers and denying the exemption. The Tribunal held that the exemption notification had to be strictly construed, that there was no scope for importing intention into a taxing notification, and that in the face of an independent expert certificate the department ought to have obtained its own technical verification rather than broadening the interpretation of the notification.

Conclusion: The exemption was held to be available to the assessees and the revenue appeals were rejected.

Final Conclusion: The impugned orders granting exemption were sustained, and the revenue failed in both connected matters.

Ratio Decidendi: An exemption notification in fiscal law must be strictly construed, and the department cannot deny the benefit by expanding the wording of the notification beyond its clear terms without contrary technical evidence.

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