Exemption under GTA notification cannot be denied without verifying evidence of non-availment of Cenvat credit.

An exemption under Notification No. 32/2004-S.T., conditioned on the GTA not availing Cenvat credit, could not be denied merely because consignment-note endorsements were incomplete, where the assessee produced other supporting material including GTA certificates. The Department was required to verify the genuineness of that evidence and establish the contrary before rejecting the benefit and confirming the demand. The prior refusal to accept the certificates without verification was held unsustainable, and the matter was remanded for fresh factual examination and reconsideration of the Board's clarification dated 21-8-2008.

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Issues: Whether the benefit of Notification No. 32/2004-S.T. could be denied for want of endorsement in the consignment notes when the assessee produced other evidence showing that the GTA had not availed Cenvat credit, and whether the matter required factual verification before confirming the demand.

Analysis: The exemption under the notification was conditional upon the concerned GTA not availing Cenvat credit on inputs or capital goods. The order did not record any allegation or finding that the GTA had in fact taken such credit. The assessee had produced endorsements in some bills and certificates from the concerned GTA in other cases. In these circumstances, the Department was required to verify the genuineness of the claim before rejecting the exemption and confirming a substantial demand. The earlier refusal to accept the certificates without verification was found unsustainable.

Conclusion: The denial of the notification benefit was set aside and the matter was remanded for necessary verification and reconsideration of the Board's clarification dated 21-8-2008. The assessee succeeded in having the demand reopened for fresh decision.

Final Conclusion: The impugned order was annulled and the dispute was sent back for fresh factual examination of eligibility to the notification benefit.

Ratio Decidendi: An exemption benefit conditioned on a third party's non-availment of credit cannot be denied merely on doubt or procedural non-compliance when the assessee produces supporting material, unless the Department first verifies and establishes the contrary.

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