Exemption notification to be strictly interpreted so as to leave no room for any extended meaning – SC

Brief of the Case

Hon’ble Supreme court in the case of B.P.L. Limited Vs. CCE held that the benefit of exemption notification is available only when the conditions of notification are strictly met by the assessee and no benefit can be allowed by taking liberal view of any condition. Thus, the benefit of notifications no.8/96 and 4/97 cannot be claimed as the apparatus is not ordinarily usable internally and so usable only with the optional accessories. But the scope of notification cover only apparatus and not accessories, hence exemption not available.

Facts of the case:

• The assessee is a manufacturer of Defibrillators. It classify the Defibrillators under C.E.T. heading 9018 and claimed exemption under Notification No.8/96 dated 23.09.1996 and Notification No.4/97 dated 01.03.97 respectively.
• The department not satisfied with the classification made by the assessee and thus, disallowed the exemption and also issued show cause notice demanding duty and equivalent penalty.
• As per the notification the exemption is allowed for D.C. Defibrillators for internal use and pacemakers.
• The point of dispute is that whether the Defibrillators manufactured by the assessee fits into the Defibrillators mentioned in the notification no. 8/96 sand 4/97.
• The tribunal decided the case in the favour of department by holding that DC Defibrillators manufactured by the assessee is mostly for external use and internal use is possible only when defibrillator is used with paddles which is an optional accessory available with the defibrillator manufactured by the assessee. Thus, the scope of exemption cannot be extended to include the defibrillator manufactured by the assessee as the same without optional accessory not usable internally.

Contention of the Assessee: