Exemption eligibility under clause 3(b) required fresh adjudication, with the remand ordered for a speaking decision.

Eligibility for exemption under clause 3(b) of Notification Nos. 32/99-C.E. and 33/99-C.E. could not be sustained on the existing record because the lower authorities had not recorded a detailed or reasoned finding on the respondents' entitlement. The appellate order granting relief was therefore set aside, as the controversy required fresh examination of eligibility and the consequential refund. The matter was remanded to the original authority for de novo consideration and a speaking order after hearing the parties.

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Issues: Whether the Revenue's appeal should succeed by setting aside the order allowing exemption under clause 3(b) of the exemption notifications and remanding the matter for fresh adjudication.

Analysis: The lower authorities had not recorded a detailed analysis or reasoned finding on the respondents' eligibility under clause 3(b) of Notification Nos. 32/99-C.E. and 33/99-C.E. The appellate order allowing relief under clause 3(b) was therefore not sustained on the existing record. Since the respondents had not challenged the order and the controversy required a proper examination of eligibility and consequential refund, fresh consideration by the original authority was warranted. The matter was accordingly sent back for a speaking order after granting hearing.

Conclusion: The impugned order was set aside and the matter was remanded to the original authority for de novo consideration under clause 3(b) of the notifications. The Revenue succeeded in the appeal by way of remand.

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