Strict construction of exemption notifications: input thickness condition cannot be extended to finished tubes and pipes.

Exemption Notification No. 202/88-CE had to be construed strictly according to its express terms: the 5 mm thickness condition applied only to the input steel plates or sheets, not to the finished tubes and pipes. The thickness of the output goods could not be imported into the notification by implication to deny exemption. On the record, the Revenue relied mainly on quality control records and invoices showing output thickness, while the manufacturer produced evidence of 5 mm coil procurement, supporting certificates, and plant capacity designed for that thickness; the Revenue did not discharge the burden of proving use of thicker inputs or any plant modification. The exemption therefore remained available.

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Issues: Whether the exemption under Notification No. 202/88-CE was available where the specified thickness condition related to the input material, and whether the thickness of the output tubes and pipes could be used to deny the exemption.

Analysis: The Notification expressly prescribed the thickness condition only for the input, namely steel plates or sheets not exceeding 5 mm. A condition not stated in the Notification could not be added by implication by linking the thickness of the finished tubes and pipes to the input requirement. The evidence relied upon by the Revenue mainly concerned the thickness of the output reflected in quality control records and invoices, whereas the record also showed procurement of 5 mm coils from SAIL, supporting certificates from the manufacturer and chartered engineer, and plant capacity designed for 5 mm thickness. On these facts, the burden to prove any alleged modification of plant capacity or use of thicker inputs was not discharged by the Revenue.

Conclusion: The exemption could not be denied on the basis of the thickness of the output goods, and the Revenue failed to establish use of inputs exceeding 5 mm; the appeal was therefore without merit and failed.

Ratio Decidendi: An exemption notification must be construed strictly according to its express terms, and a condition imposed only on the input cannot be extended by implication to the finished product.

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