TMI Blog2000 (4) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The concession was in respect of Air-Conditioners used in the establishments stipulated in the Schedule to the notification. Sl. No. 11 of the Schedule related to "Any hospital run by the Central Government, a State Government, a Local Authority or a Public Charitable Institution". The conditions of the notification are as under : - "(i) the Collector of Central Excise is satisfied that such air-conditioners are required for use in any of the establishments specified in the Schedule hereto annexed; (ii) the manufacturer furnishes to the Collector of Central Excise a written undertaking by the owner, or, as the case may be, the Chief Executive of the establishment in respect of which such air-conditioners are required, that he will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this is a case in which there has been substantive compliance by the appellants with the conditions of the notification and the delay in intimating the department is condonable and is not, in any case , such which may be fatal to their claim for benefit of Notification No. 56/78. However, in view of the decision of the Tribunal in the case of Jyoti Ltd. v. Collector of Customs, Baroda (Final Order No. 81/96-B, dated 26-2-1996) and the rulings of the Supreme Court in Thermax Pvt. Ltd. v. Collector of Customs reported in 1992 (61) E.L.T. 352, he felt that the issue may be referred to a Larger Bench. Therefore, the matter was placed before a Third Member. The learned Judicial Member who heard the difference of opinion favoured referring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1965 (3) SCR 626 (S.C.), Mangalore Chemicals Fertilizers Ltd. reported in 1991 (55) E.L.T 437 (S.C.), Union of India v. Wood Paper Ltd. reported in 1990 (47) E.L.T. 500 (S.C.) and Novopan India Ltd. reported in 1994 (73) E.L.T 769 (S.C.). He also referred to several decisions of the Tribunal. 6. The learned CDR submitted that the rule relating to interpretation of exemption notifications emerging from the judgments of the Supreme Court is that exemption being in the nature of exceptions, it is to be construed strictly at the stage of determination whether assessee falls within its term or not and in case of doubt or ambiguity, benefit of it must go to the State. He referred in this context to the decision of the Supreme Court in Novopan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction." 8. In the Mangalore Chemicals Fertilizers Ltd. case, while dealing with the question of satisfaction of conditions in the exemption notifications for availing of the benefits, the Supreme Court observed that "if the condition was a substantive one and one fundamental to the policy underlying the exemption, failure to satisfy the same would lead to denial of the exemption" and the Court ruled as under :- "Stringency and mandatory nature must be justified by the purpose intended to be served. The mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blishments. It is not in dispute that the appellants' hospital fulfilled the criterion. Thus, at the eligibility stage, according to the strict construction of the notification, the appellants are eligible for the benefit. There is also no dispute raised that the appellants fulfilled the condition of using the exempted goods in the hospital for the approved purposes. The dispute is only about the delay in intimation and inspection by Excise etc. These conditions cannot be treated as substantive and mandatory and based on considerations of Policy. As the Supreme Court pointed out in the Mangalore Chemicals Fertilizers Ltd. case, it would be erroneous to attach equal importance to the non-observance of all conditions irrespective of the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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