Inclusive exemption for saltpetre covers synthetically manufactured goods when the notification uses broad explanatory language.

Notification No. 263/88 exempted saltpetre falling within the specified tariff chapters from excise duty, and its inclusive explanation showed that the exemption was not limited to a single manufacturing method. The definition expressly extended to saltpetre including rasi, sajji, substances manufactured from saline earth, kherinum, and forms of sulphate or carbonate of soda, indicating coverage of saltpetre produced by different processes unless clearly excluded. On that construction, synthetically manufactured saltpetre remained within the notification and the departmental view that the product was exempt was upheld.

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Issues: Whether saltpetre manufactured synthetically was covered by Notification No. 263/88 dated 06.10.1988 so as to entitle the assessee to exemption and Modvat credit.

Analysis: The notification exempted saltpetre falling within Chapters 25, 28 or 38 of the Central Excise Tariff Act, 1985 from the whole of the duty of excise. Its explanation used inclusive language and stated that, for the purpose of the notification, saltpetre includes rasi, sajji, all substances manufactured from saline earth, kherinum, and every form of sulphate or carbonate of soda. The inclusive wording showed that the exemption was not confined to one method of manufacture. Since the product was treated as saltpetre and the explanation extended to saltpetre manufactured by any process, the goods remained within the scope of the notification.

Conclusion: The product was covered by the exemption notification and the assessee was not entitled to succeed on the claim of non-exemption.

Final Conclusion: The appeal failed and the departmental view that the product was exempt under the notification was upheld.

Ratio Decidendi: An exemption notification with an inclusive definition extends to all forms of the specified commodity covered by the explanatory language, including goods manufactured by different processes, unless the notification clearly excludes them.

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