Strict construction of exemption notifications means spares are not "components", and later expansion of relief is prospective only.

Exemption notifications are construed strictly: the expression "components" in Notification No. 123/81 was treated as covering parts used in initial assembly or manufacture, not spares kept for future replacement, so the exemption was unavailable for spares. A later notification extending the benefit to spares was treated as a separate enlargement of scope, not a clarificatory amendment, because spares and components were distinct expressions and no retrospective clause was provided. The amended exemption therefore operated only from its commencement date, and the duty demand was sustained on that basis.

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Issues: (i) Whether spares were covered by the expression "components" in Notification No. 123/81 and were eligible for exemption. (ii) Whether Notification No. 152/85 extending the benefit to spares operated retrospectively as a clarificatory amendment.

Issue (i): Whether spares were covered by the expression "components" in Notification No. 123/81 and were eligible for exemption.

Analysis: The notification granted exemption to capital goods, components and raw materials. The expression "components" was held to denote parts used in the initial assembly or manufacture, whereas spares are parts kept in reserve for future replacement. The two expressions were treated as distinct and not interchangeable. In the absence of any specific mention of spares in the notification, the exemption could not be extended by interpretation.

Conclusion: The spares were not covered by Notification No. 123/81 and the exemption was not available to the assessee.

Issue (ii): Whether Notification No. 152/85 extending the benefit to spares operated retrospectively as a clarificatory amendment.

Analysis: The later notification introduced spares as a separate category of exempt goods. Since spares and components were held to be distinct expressions, the later notification was not merely clarificatory. In the absence of any deeming or retrospective clause, the amendment was held to operate only from its own date of commencement.

Conclusion: Notification No. 152/85 did not apply retrospectively.

Final Conclusion: The demand of duty was sustained, and the appeal failed on merits.

Ratio Decidendi: An exemption notification must be construed strictly, and a later amendment enlarging the scope of exemption is prospective unless the statute expressly makes it retrospective.

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