Ambiguity on interpretation of the exemption notification must be in favour of revenue
The Supreme Court in case of Commissioner of Customs (Import) Mumbai Vs. M/s Dilip Kumar and Company and Ors (2018-TIOL-302-SC-CUS-CB), held that in case of ambiguity in a charging provision, benefit must be necessarily go in favour of assesse but the same is not true for an exemption notification. When there is ambiguity in exemption notification which is subject to the strict interpretation, the benefit of such ambiguity cannot be claimed by the assesse and it must be interpreted in favour of the revenue. The view taken in this case, has overruled the judgment given in the case of Sun Export Corporation, Bombay vs. Collector of Customs, Bombay (2002-TIOL-118-SC-CX-LB), where the benefit of the ambiguity on the interpretation of the exemption notification was conferred in favour of the assesse.
In this case, it is observed that the Exemption notification should be interpreted strictly and the burden of proving applicability would be on the assesse to show that his case comes within the parameters of the exemption clause or exemption notification. Also, when there is an ambiguity in the exemption notification which is subject to strict interpretation, the benefit of such ambiguity shall be made available to the revenue, unlike the taxing provisions where the benefit of ambiguity goes in favour of the assesse.
However, under GST regime also, the assessees are required to be more careful while claiming the benefit of the exemption notification.