Strict construction of exemption notifications denied customs benefit for a paver machine that failed prescribed paving-width conditions.

Imported paver machine did not qualify for customs exemption because, as imported, it could lay bituminous pavement only up to 3 metres, while the notification required capability of 7 metres and above. Bolt-in extensions ordered separately were treated as accessories and could not alter the machine's essential character or cure non-compliance with the notification conditions. The exemption was therefore construed strictly and applied only where the importer clearly established that the goods met the prescribed terms on their own. The benefit of Notification No. 21/2002-Cus. was held inadmissible, and the Revenue's challenge succeeded.

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Issues: Whether the imported paver machine qualified for exemption under Notification No. 21/2002-Cus. dated 01.03.2002 despite requiring bolt-in extensions to achieve the stipulated paving width.

Analysis: The machine, as imported, was found capable of laying bituminous pavement only up to 3 metres, while the exemption entry required capability of laying 7 metres and above. The claimed width was achievable only with separately ordered bolt-in extensions, which were accessories and could not alter the essential character of the machine. Exemption notifications are to be construed strictly, and the claimant must establish clear coverage within the terms of the notification. Applying the earlier larger bench view and the principle that ambiguity in an exemption must be resolved in favour of the Revenue, the machine did not satisfy the notification conditions.

Conclusion: The benefit of Notification No. 21/2002-Cus. dated 01.03.2002 was not admissible, and the Revenue's challenge succeeded.

Ratio Decidendi: An exemption notification must be construed strictly, and a machine qualifies only if it satisfies the prescribed conditions on its own terms, without relying on accessories that do not change its essential character.

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