Exemption under export-oriented supply notification fails when goods never reach destination and rewarehousing proof is not received on time.

Exemption under Notification No. 1/95-C.E. was denied where goods cleared without payment of duty for supply to a 100% export oriented unit were destroyed in transit and never reached the destination. The notification required the manufacturer to pay duty if the rewarehousing certificate was not received within 90 days from removal, and that condition was not satisfied. As the exemption condition failed, the duty demand was upheld and the assessee was not entitled to retain the benefit of the notification.

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Issues: Whether the assessee was entitled to retain the benefit of Notification No. 1/95-C.E. when goods cleared without payment of duty for supply to a 100% export oriented unit were destroyed in transit and the rewarehousing certificate was not received within the prescribed period.

Analysis: The notification placed responsibility on the manufacturer to pay duty if the rewarehousing certificate was not received within 90 days from the date of removal. The goods in question never reached the 100% export oriented unit, and therefore the condition for exemption was not fulfilled. On that basis, no legal infirmity was found in the demand confirmed by the lower authority.

Conclusion: The assessee was not entitled to the exemption benefit, and the duty demand was sustained.

Final Conclusion: The appeal failed and the demand confirmed by the lower authority remained in force.

Ratio Decidendi: Where goods cleared without payment of duty for supply to a 100% export oriented unit do not reach the destination and the rewarehousing certificate is not received within the stipulated time, the exemption under the notification is not available and duty becomes payable.

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