EXEMPTION

The Central Government has the power to exempt, in public interest, specified goods from levy of customs duty by issue of notifications or special orders, Power to exempt includes power to modify or withdraw the exemption. Government can at any time withdraw even a time bound exemption if “public interest” so demands. Exemption from customs duty means exemption only from basic customs duty. Exemption from excise duty has the effect of exempting additional duty of Customs.

The work of monitoring of compliance of end use condition in exemption notifications has been assigned to the Assistant Commissioner of Central Excise having jurisdiction over the factory of the manufacturer-importer. The importer should get himself registered with the Assistant Commissioner of Customs who will allow the concessional rate on presentation each time, or for a quarter, of an application countersigned by the Assistant Commissioner of Central Excise. If in the case of an exemption based on end use, where the importer is only a trader and the goods have multiple uses, the importer should adduce evidence to show the goods imported by him were for the stipulated use.

Benefit cannot be extended to someone on the ground that such benefit had wrongly been extended to others.

Onus to establish his eligibility to the exemption notification is on the assessee. An exemption, being an exception, is interpretable strictly and if there is any doubt or ambiguity, it is to be resolved in favour of the Revenue. But if there is no doubt or ambiguity, the exemption need not be interpreted strictly. If more than one exemption notification is applicable to a given situation, benefit of both is allowable to the assessee.

Accessory when imported with the machine is not eligible to exemption unless that accessory has expressly been included in the exemption notification.