Exclusionary clause in exemption should be interpreted strictly :
Sometimes, exemption notification gives exemption, but specifically excludes some articles from the exemption, by way of an exclusionary clause. In Pappu Sweets v. Commissioner of Trade Tax 1998 AIR SCW 3170 = (1998) 7 SCC 228 = AIR 1998 SC 3247= 178 ELT 48 = 111 STC 425 (SC 3 member bench), it was held that such exclusionary clause should be read rather strictly. Even if words used in exclusionary clause of an exemption notification have wide dictionary meaning or connotation, only that meaning should be given which would achieve rather than frustrate the object of granting exemption and which does not lead to uncertainty or unintended results.
In CC v. Modi Rubber Ltd. 1999(114) ELT 769 = 2000 AIR SCW 120 = AIR 2000 SC 1844(SC 3 member bench), it was held that exclusion clause in exemption notification should be interpreted with regard to principal clause.