Exemption under Notification No. 203/92-Cus. cannot be denied on a mere presumption of Modvat credit availment.

The exemption under Notification No. 203/92-Cus. could not be denied merely on a presumption that Modvat credit under Rule 57A of the Central Excise Rules, 1944 had been taken. The record contained no material showing actual availment of input credit, and the importers consistently denied having taken such credit. In the absence of evidence to support the presumption, denial of the exemption was unjustified, and the benefit of the notification was held to remain available.

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Issues: Whether the benefit of Notification No. 203/92-Cus. could be denied on the basis that input-stage credit under Rule 57A of the Central Excise Rules, 1944 was presumed to have been availed.

Analysis: The demand had been confirmed only on an inference that, since input credit was available, the importers must have availed Modvat credit. The record did not contain material showing actual availment of such credit, while the importers consistently maintained that no credit had been taken. In the absence of evidence to support the presumption, denial of the exemption was not justified.

Conclusion: The benefit of exemption under Notification No. 203/92-Cus. was held to be available to the appellants.

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