Advance Licence exemption unaffected by rebate on exported goods when notification and corrigendum do not bar the claimed benefit.

The amended condition in Notification No. 93/2004-Cus., read with the corrigendum and Board clarification, was meant to simultaneous availment of Advance Licence benefits and rebate of duty on inputs used in exported goods, not to deny exemption merely because rebate was availed on the exported resultant product. The department's approach incorrectly treated the unamended condition as continuing and conflated rebate on inputs with rebate on the export product. On the stated facts, the notification did not prohibit the benefit claimed, so denial of exemption and the related demand of duty forgone were unsustainable.

---

---

Issues: Whether the condition in Notification No. 93/2004-Cus., as amended by the corrigendum, barred the importer from claiming exemption under the Advance Licence Scheme merely because a third-party exporter had availed rebate on the exported goods, and whether the demand of duty forgone could be sustained.

Analysis: The amended condition was intended only to prevent simultaneous availment of the Advance Licence benefit and rebate of duty paid on materials used in the manufacture of export goods. The clarification issued by the Board and the corrigendum restored the position that rebate of terminal excise duty on the exported resultant product was not hit by the prohibition. The department's premise treated the situation as if the unamended condition continued to apply and also conflated rebate on inputs with rebate on the export product, which was not the correct legal position. Since the applicable notification, read with the corrigendum and the Board's clarification, did not prohibit the benefit claimed in the facts of the case, the denial of exemption and consequent demand could not stand.

Conclusion: The demand of duty forgone was unsustainable and was set aside. The appeal succeeded in favour of the assessee.

---