Strict construction of exemption notifications excludes locomotives and rolling stock from machinery installed in a factory.

Notification No. 281/86-C.E. exempted excisable goods made in a factory workshop only when they were intended for repair or maintenance of machinery installed in that factory or another factory of the same manufacturer. The Tribunal applied strict construction of the exemption and held that locomotives, wagons, rolling stock and similar moving transport equipment are not machinery installed in a factory. It distinguished broader definitions of "plant" under income-tax decisions as inapplicable to the notification and the Central Excise Act. On that basis, parts manufactured for such equipment did not qualify for the exemption and the claim failed.

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Issues: Whether parts manufactured for locomotives, wagons and rolling stock were entitled to exemption under Notification No. 281/86-C.E. as goods intended for repair or maintenance of machinery installed in the factory.

Analysis: The notification exempted excisable goods manufactured in a workshop within a factory only when they were intended for use in that factory, or another factory of the same manufacturer, for repair or maintenance of machinery installed therein. The condition was specific and had to be satisfied strictly. The Tribunal held that locomotives, rolling stock and similar moving transport equipment are not machinery installed in the factory within the meaning of the notification. Earlier decisions under the Income-tax Act dealing with the wider expression "plant" or with special statutory definitions were distinguished as inapplicable, because no similar enlarged definition existed in the notification or in the Central Excise Act. The principle of strict construction of exemption notifications was applied.

Conclusion: The exemption was not available to the appellants and the claim failed.

Final Conclusion: The appeal was rejected because the notification covered only machinery installed in the factory and not machinery merely used in the factory.

Ratio Decidendi: An exemption notification granting relief for goods intended for repair or maintenance of machinery installed in a factory must be construed strictly, and moving transport equipment not fixed or installed in the factory does not satisfy that condition.

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