Strict construction of exemption notifications bars duty-free fuel clearance without amended approval requirements being met.

A 100% export oriented unit could not continue duty-free clearance of HSD/FO after amendment of Notification No. 1/95-C.E. because the amended condition required prior approval of the Commissioner of Customs on the recommendation of the Development Commissioner for fuel, lubricants and consumables. An earlier CT-3 certificate could not override the new procedural , and exemption notifications must be strictly construed. Duty-free benefit for goods procured after the amendment was therefore unavailable unless the prescribed approval was obtained.

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Issues: Whether the respondents, a 100% export oriented unit, could continue to avail duty-free clearance of HSD/FO on the strength of an earlier CT-3 certificate after Notification No. 1/95-C.E. was amended by Notification No. 31/98-C.E., or whether prior approval of the Commissioner of Customs on the recommendation of the Development Commissioner became mandatory.

Analysis: The exemption under Notification No. 1/95-C.E. originally permitted duty-free procurement of specified goods subject to prescribed procedure. By the amending Notification No. 31/98-C.E., a specific condition was inserted requiring approval of the Commissioner of Customs on the recommendation of the Development Commissioner for fuel, lubricants and consumables. The earlier CT-3 certificate could not override the amended condition, and the benefit of exemption after 15.09.1998 depended upon compliance with the new approval requirement. Exemption notifications are to be strictly construed, and the benefit can be claimed only when the prescribed conditions are fulfilled.

Conclusion: The respondents were not entitled to claim duty-free benefit on HSD/FO procured after the amendment on the basis of the old CT-3 certificate, and the exemption was rightly denied.

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