Page 191 - ELT_1st September 2020_Vol 373_Part 5

2020 ] TRIBENI METALLOYS PVT. LTD. v. COMMISSIONER OF C. EX. & S.T., GUWAHATI 629

burden or progressive approach of fiscal provisions intended to augment
State revenue. But once exception or exemption becomes applicable no rule
or principle requires it to be construed strictly. Truly speaking liberal and
strict construction of an exemption provision are to be invoked at different
stages of interpreting it. When the question is whether a subject falls in the
notification or in the exemption clause then it being in nature of exception
is to be construed strictly and against the subject but once ambiguity or
doubt about applicability is lifted and the subject falls in the notification
then full play should be given to it and it calls for a wider and liberal con-
struction.”
22. In Principles of Statutory Interpretation by Justice G.P. Singh 14th
edition in Page 104 it has been provided as follows :-
“There can, however, be no doubt that exemptions made with a benef-
icent object e.g., to encourage increased production or to give incentive to
co-operative movement or for the purpose of developing urban or rural ar-
eas for public goods, or for encouraging investment in new machinery or
plant or a new industrial unit or setting up an industry in the backward ar-
ea in terms of the industrial policy, have to be liberally construed. Similarly,
beneficial notifications having their purpose as encouragement or promo-
tion of certain activities should be liberally interpreted. Therefore, when a
provision is made permitting concessional rates of tax for the purpose of
encouraging an industrial activity, the provision has to be liberally con-
strued. So if the object of an exemption notification is to encourage the use
of indigenous rice bran oil and to discourage the use of edible oils in soap
manufacture, a narrow construction of the notification which defeats this
object cannot be accepted and preference has to be given to a wider con-
struction which promotes the object. Similarly in an exemption notification
issued with the object to encourage exports by granting exemption from
customs duty on materials that are needed for the manufacture of the re-
sultant product, the words ‘material required to be imported for the pur-
pose of manufacture of products’ were construed to include not only mate-
rials which are actually used in the manufacture but also materials which
though not used in the manufacture are yet required in order to manufac-
ture the resultant product. And an exemption notification granting rebate
in excise duty to induce the manufacturers of sugar to produce more in the
then current sugar year was construed consistent with this object and the
words, ‘the quantity of sugar produced during the corresponding period’
as used in the notification were construed to cover the case of a factory
which has not produced at all during the relevant corresponding period.
An exemption provision cannot be denied full effect by a circuitous process
of interpretation, and liberal language used in a notification must be given
due weight. So if the taxpayer is within the plain terms of the exemption
notification, he cannot be denied the benefit calling in aid, any supposed in-
tention, and the language of the notification has to be given effect to.”
23. In Swadeshi Polytex Ltd. v. Collector of Central Excise reported in
(1990) 2 SCC 358 = 1989 (44) E.L.T. 794 (S.C.) in paragraph 21, it has been held as
under :
“21 ……. But the strictness of the construction of exemption notifica-
tion does not mean that the full effect to the exemption notification should
not be given by any circuitous process of interpretation. After all, exemp-
tion notifications are meant to be implemented and trade notices in these
matters clarify the stand of the Government for the trade....”
24. In Indian Farmers Fertiliser Co-operative Ltd. v. Collector of Central

EXCISE LAW TIMES  1st September 2020  191