Cement exemption for own clinker remained available despite some use of purchased clinker; penalty also failed.

Cement exemption under the relevant notifications was available for cement manufactured from the assessee's own clinker, and that benefit was not lost merely because a small part of production also used purchased clinker. The proviso was treated as excluding only cement made from clinker not produced in the same factory, not as denying exemption for cement made from own clinker. As the exemption could not be refused on that basis, the consequential penalty also could not be sustained.

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Issues: Whether the exemption under the relevant cement notifications could be denied for cement manufactured from the assessee's own clinker merely because a small portion of the production was also made from clinker purchased from outside, and whether the consequential penalty could survive.

Analysis: The notifications granted partial exemption to cement manufactured in factories of the relevant category, while excluding cement manufactured from clinker not made in the same factory. The proviso was read as clarifying that the exemption attached to cement produced from the assessee's own clinker and was not lost merely because some cement was also produced from purchased clinker. The exclusion operated only against cement made from outside clinker, not against cement manufactured from own clinker. Since the exemption could not be denied on that basis, the consequential basis for penalty also failed.

Conclusion: The exemption was admissible for cement manufactured from the assessee's own clinker, and the penalty could not be sustained.

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