Exemption declaration misstatement sustained; limited remand allows credit note deduction claim to be examined for clearances and duty recomputation.

Misstatement in the exemption declaration was sustained because the assessee's figures were found to be incorrect after including exports to Nepal as required by the notification, so denial of the notification benefit and issuance of notice were justified. The matter was remanded only for the limited purpose of enabling the assessee to establish that the aggregate clearances were wrongly worked out because the discount in the credit note dated 31-3-97 had not been deducted. Entitlement to that deduction was left open for the original authority to decide. If the assessee fails on remand, duty and penalty are to be recomputed in line with the principle in Srichakra Tyres Ltd.

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Issues: Whether the matter should be remanded to the original authority for giving the assessee an opportunity to establish deduction of the credit note amount while computing the aggregate clearances for exemption under Notification No. 16/97-C.E., and the consequential effect on duty and penalty.

Analysis: The declaration filed by the assessee was found to contain a wrong figure when the value of exports to Nepal was included as required by the notification. The Tribunal held that the department was justified in issuing the notice and in denying the benefit of the notification on the basis of misstatement. At the same time, the assessee was permitted to show that the turnover figure had been wrongly worked out because the discount reflected in the credit note dated 31-3-97 had not been taken into account. The Tribunal expressly limited the remand to this aspect and left the question of entitlement to the deduction open for determination by the original authority. It was also directed that, if the assessee failed on this point, duty and penalty would have to be recomputed in accordance with the principle laid down in Srichakra Tyres Ltd.

Conclusion: The matter was remanded for a limited reconsideration of the credit note deduction, while the finding that the assessee had made a misstatement in the declaration was sustained.

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