More beneficial exemption under a single notification applies when conditions are met, defeating duty demand and penalty on drilling rigs.

Drilling rigs classified under Heading 8705 were treated as special purpose motor vehicles and were held eligible for exemption under Sl. No. 217 of Notification No. 6/2002 where the chassis was duty paid. The notification contained multiple entries, and the assessee was entitled to the more beneficial exemption when the stated conditions were satisfied. On that basis, the duty demand could not survive, and the penalty also failed because it had no independent basis once nil rate of duty applied.

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Issues: Whether drilling rigs classifiable under Heading 8705 were entitled to exemption under Sl. No. 217 of Notification No. 6/2002 dated 1.3.2002, and whether the demand and penalty could be sustained.

Analysis: The goods were not in dispute as to classification under Heading 8705 as special purpose motor vehicles. The exemption notification contained more than one entry, and the relevant condition under Sl. No. 217 stood satisfied as the chassis was duty paid. Where two entries are available, the assessee is entitled to the more beneficial exemption. In that view, the demand could not survive. Once the goods were eligible for nil rate of duty, penalty had no independent basis.

Conclusion: The assessee was entitled to exemption under Sl. No. 217 of Notification No. 6/2002 dated 1.3.2002, and the demand and penalty were unsustainable.

Ratio Decidendi: When an assessee satisfies the conditions of a specific exemption entry and another entry in the same notification is less beneficial, the assessee is entitled to the more beneficial exemption and the duty demand and consequential penalty fail.

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