Exemption notification scope controls duty computation: circulars cannot expand it, and unamended text governs until express amendment.

For DTA clearances by a 100% EOU made before 01.03.2002, duty under Notification No. 2/95-CE had to be computed at 50% of each duty of customs leviable on like imported goods, not at 50% of the aggregate duties of customs. The later amendment in Notification No. 11/2002-CE confirmed that the earlier text did not already permit an aggregate-basis calculation. A departmental circular could not enlarge or vary the scope of the notification, and binding larger bench authority governed the demand period. The duty demand was therefore unsustainable, and the appeal succeeded with penalty set aside.

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Issues: Whether, for DTA clearances made by a 100% EOU prior to 01.03.2002, duty under Notification No. 2/95-CE dated 04.01.1995 was to be computed at 50% of each of the duties of customs or at 50% of the aggregate duties of customs, and whether a circular could enlarge or vary the notification.

Analysis: The notification, as it stood before amendment by Notification No. 11/2002-CE dated 01.03.2002, required calculation at 50% of each of the duties of customs leviable on like imported goods. The later amendment substituted the language with 50% of the aggregate duties of customs, showing that the earlier text could not be read as already covering the aggregate basis. The circular relied upon by the department could not enhance or vary the scope of the notification. The issue was covered by binding larger bench authority, which applied equally to the present demand period.

Conclusion: The duty for the relevant period had to be computed at 50% of each duty of customs, not at 50% of the aggregate duties of customs. The demand was unsustainable.

Final Conclusion: The appeal succeeded and the duty demand and penalty were set aside, with consequential relief as admissible.

Ratio Decidendi: A circular cannot expand or alter the scope of an exemption notification, and the applicable method of duty computation is governed by the unamended notification until it is expressly amended.

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