Exemption notification interpretation: departmental circulars limited the condition, and export through a merchant exporter did not defeat relief.

Customs duty exemption under the relevant notification could not be denied on a broader reading of the condition where departmental corrigenda and circulars clarified its limited scope. The clarification showed that the condition was meant only to prevent simultaneous benefit of rebate on duty paid on materials and the advance licence benefit, and not to bar rebate on terminal excise duty on the export product. The clarifications also recognized exports routed through a merchant exporter. As the assessee's advance licence was issued after the corrigendum restoring the correct position, the Revenue's objection based on condition No. 5 failed and the exemption was upheld.

---

---

Issues: Whether the assessee was entitled to customs duty exemption under the relevant notification despite export of the processed goods through a merchant exporter and the rebate being availed by the third party.

Analysis: The Board's corrigenda and circulars clarified that the condition in the notification was intended only to prevent simultaneous availment of rebate on duty paid on materials and the advance licence benefit, and not to bar rebate on terminal excise duty on the export product. The clarifications also recognized export through a merchant exporter. The assessee's advance licence was issued after the corrigendum restoring the correct position, and the Revenue could not displace its own circulars and clarifications.

Conclusion: The assessee was entitled to the exemption and the Revenue's objection based on condition No. 5 failed.

Ratio Decidendi: Where the departmental corrigenda and circulars clarify the scope of an exemption notification, the exemption cannot be denied by applying a broader reading inconsistent with those clarifications, including on the ground that export was effected through a merchant exporter.

---