Clarificatory exemption notification protects vessel duty payments from an impermissible additional demand under the customs structure.

Exemption under Notification No. 93/88-C.E. was available where the assessee had already discharged the full duty structure lawfully recoverable on the vessel. The proviso was read narrowly by the department, but Notification No. 63/91 was treated as clarificatory of the earlier exemption scheme. Since the total levy contemplated under the applicable customs structure had already been paid, denial of exemption would have caused an impermissible additional demand. The exemption benefit was therefore available, and the contrary orders were unsustainable.

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Issues: Whether the assessee was entitled to exemption under Notification No. 93/88-C.E. when the duty payable on the vessel had already been discharged in the aggregate amount contemplated by the earlier customs notifications.

Analysis: The duty paid on the vessel was not in dispute, and the total levy contemplated under the applicable customs structure was Rs. 1,400 per LDT, being the sum of the customs duty and additional duty components. The refusal of exemption was based on a narrow reading of the proviso to Notification No. 93/88-C.E. The later Notification No. 63/91 was treated as clarificatory of the earlier notification. Since the assessee had already paid the full amount that could lawfully be recovered, denial of the exemption would have resulted in an impermissible additional demand.

Conclusion: The assessee was entitled to the benefit of the exemption notification, and the impugned orders were unsustainable.

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