Strict construction of exemption notifications denies ship-breaking benefit when the prescribed duty condition is not satisfied.

Notification No. 103/87-CE granted exemption for goods obtained from breaking up a ship only where customs duty had been paid on that ship at the prescribed rate of Rs. 1,400 per LDT. Where the ship had been imported earlier and duty was not paid at that notified rate, the substantive condition for exemption was not met. The notification could not be expanded beyond its express terms, so strict compliance with the exemption condition was required and the benefit was unavailable in such cases.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 103/87-CE dated 27.3.87 in respect of goods obtained from breaking up of a ship, where the ship had not paid customs duty at Rs. 1400 per LDT.

Analysis: The notification granted exemption only if the goods were obtained from the breaking up of a ship on which customs duty had been paid at the prescribed rate of Rs. 1400 per LDT. The ship in question was imported earlier, when the applicable duty rate was lower, and the admitted payment at that time was not at the notified rate. The condition attached to the exemption was therefore not satisfied, and the scope of the notification could not be enlarged to cover such cases.

Conclusion: The appellant was not entitled to the exemption benefit, and the finding denying the notification was upheld.

Final Conclusion: Exemption notifications must be applied strictly, and where a substantive condition attached to the exemption is not fulfilled, the benefit cannot be extended.

Ratio Decidendi: A fiscal exemption is available only upon strict satisfaction of the express conditions of the notification; if the prescribed condition is not met, the exemption cannot be claimed by implication or equitable extension.

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