Exemption notification conditions require specific proof; verified export documents defeated allegations of premature disposal and non-export.

An exemption notification dispute turned on whether imported goods were disposed of before export obligations were met and whether the exported goods were in fact cleared at Dubai. The record did not substantiate premature disposal: the notice lacked specific particulars of time, place, manner, or recipient, and foreign exchange realization followed the relevant exports. On the non-export allegation, Dubai Bills of Entry, Indian Embassy verification, and customs examination supported actual export and clearance at Dubai. The stated principle is that breach of exemption conditions must be proved by specific, credible evidence, not conjecture.

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Issues: (i) Whether the imported goods were disposed of before fulfilment of the export obligation and realization of export proceeds under the exemption notification. (ii) Whether the department had established that the goods claimed to have been exported were not actually exported or cleared at Dubai.

Issue (i): Whether the imported goods were disposed of before fulfilment of the export obligation and realization of export proceeds under the exemption notification.

Analysis: The record showed that the imported goods were cleared around 18 January 1994, while most of the exports relied upon by the respondent were dated prior to that clearance. The show cause notice did not furnish specific particulars as to the time, place, manner, or recipient of any alleged disposal. The disputed conversion payment did not support the allegation of disposal in the normal course. The foreign exchange was realized in February 1994, and the material on record did not substantiate a breach of the condition against disposal before fulfilment of export obligation.

Conclusion: The allegation of pre-export disposal was not proved and the finding is in favour of the assessee.

Issue (ii): Whether the department had established that the goods claimed to have been exported were not actually exported or cleared at Dubai.

Analysis: The respondent produced Dubai Bills of Entry and the Indian Embassy verification also confirmed receipt and clearance of the exported goods at Dubai. The customs examination at the port of export supported the export documents. The challenge based only on the limited extent of physical examination by customs could not outweigh the verified destination evidence on record.

Conclusion: The allegation of non-export failed and the finding is in favour of the assessee.

Final Conclusion: The Revenue failed to establish any violation of the exemption conditions, and the appeal was rejected.

Ratio Decidendi: An allegation of breach of an exemption notification condition must be supported by specific and credible evidence; where export and foreign destination clearance are verified on record, a charge of non-export or premature disposal cannot be sustained on conjecture.

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