Exemption notification relief on input duty denied where fully exempt final product left no set-off or refund entitlement.

An exemption notification granting concessional relief for polyester staple fibre did not create a separate entitlement to refund or set-off of duty paid on Mono Ethylene Glycol used as an input. Because the final product was already fully exempt, the claim for credit on the input duty failed. The notification was construed as a special relief provision limited by its clear language, and it did not expressly authorise refund of duty on the input material. The resulting principle is that, where relief is confined to the final product to the extent of duty paid on inputs, no set-off or refund of input duty is available unless the notification specifically provides for it.

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Issues: Whether the assessee was entitled to set-off or refund of duty paid on Mono Ethylene Glycol used in the manufacture of polyester staple fibre under the exemption notification.

Analysis: The notification granting relief applied to polyester staple fibre to the extent of duty paid on inputs and did not create an entitlement to refund of duty paid on the input itself. As the final product was already fully exempt, the claimed set-off on MEG was not available. The notification was a special concessional provision and its clear language did not support refund of duty on the input material.

Conclusion: The claim for set-off or refund on MEG was not allowable, and the finding against the assessee was upheld.

Ratio Decidendi: Where an exemption notification grants concessional relief only to the final product to the extent of duty paid on inputs, and the final product is fully exempt, no refund or set-off of duty paid on the input is available unless the notification expressly provides for it.

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