Strict construction of exemption notifications denied relief for battery parts used in another factory's stationary battery manufacture.

Parts of storage batteries cleared under Notification No. 68/86-CE were held ineligible for exemption when they were used in the manufacture of stationary batteries at another factory after Chapter X procedure. The notification was construed strictly and limited the exemption to parts used in the factory of production for manufacture of storage batteries. The evidence accepted below showed a real distinction between storage batteries and stationary batteries, and no equivalence could be implied. The alternative claim based on stationary batteries also failed because the clearance and classification did not establish manufacture of parts of stationary batteries. The demand was sustained and the exemption denied.

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Issues: Whether parts of storage batteries cleared under Notification No. 68/86-CE were entitled to exemption when used in the manufacture of stationary batteries at another factory after Chapter X procedure.

Analysis: The notification granted exemption to parts of storage batteries only when used in the factory of production for manufacture of storage batteries. The record showed that the cleared parts were used for manufacture of stationary batteries at another manufacturer's premises. The distinction between storage batteries and stationary batteries was accepted on the evidence before the appellate authority, and the exemption notification was held to require strict construction without importing an intended equivalence between the two categories. The plea that the parts should qualify under the alternative entry for stationary batteries was rejected because the declared classification and the factual clearance did not establish manufacture of parts of stationary batteries.

Conclusion: The exemption was not available to the appellants, and the demand was sustained.

Final Conclusion: The appeal failed and the order denying exemption and confirming duty was upheld.

Ratio Decidendi: An exemption notification must be construed strictly, and parts exempted for use in the manufacture of storage batteries do not automatically qualify when used in the manufacture of a different battery category at another factory.

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