Exemption notification interpretation favours importer where re-export time limit applies only to the extension period, not the full term.

Under Notification No. 136-Customs dated 29-9-1962, the re-export period for imported goods was construed as an initial six months, with power to extend the time up to one year; the one-year ceiling applied only to the extension, not to the entire period from import. In a fiscal exemption setting, any ambiguity was to be resolved in favour of the importer. On that reading, re-export within the extended period was treated as timely, the delay was condoned, and consequential relief followed.

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Issues: Whether, under Notification No. 136-Customs dated 29-9-1962, the period for re-export of imported goods meant one year in all, or six months with a further extendable period up to one year, and whether the delay in re-export could be condoned.

Analysis: The authorities had proceeded on the footing that the imported goods had to be re-exported within a total period of one year from the date of import. The correct reading of the proviso, however, showed that the initial period was six months and the limitation of one year applied only to the extension that could be granted. The language of the notification made it clear that the phrase limiting the period to one year governed the extended period, not the entire period from import. Even if two interpretations were possible, the one favourable to the importer had to be adopted in such a fiscal exemption setting. On that reading, the re-export had taken place within the condonable extended period.

Conclusion: The delay was rightly condoned and the revision was allowed in favour of the petitioners, with consequential relief.

Ratio Decidendi: Where an exemption notification permits re-export within an initial period with power to extend the time up to one year, the one-year limit applies to the extension and any ambiguity in the notification must be resolved in favour of the assessee.

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