Exemption under Notification No. 9/2003-CE cannot be denied without proving the factual basis for disallowance.

Notification No. 9/2003-CE could not be denied unless the Revenue established the factual basis for exclusion from the aggregate clearance value and the condition relied on by the assessee was actually in issue. The assessee had not claimed the rural-area basis for exemption, and the show cause notice did not include evidence showing that the factory was located in a rural area. The Revenue also could not rely on material outside the notice-stage record to disallow the benefit. The denial of exemption was therefore unsustainable, and the assessee remained entitled to the notification benefit.

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Issues: Whether the assessee could be denied the benefit of Notification No. 9/2003-CE on the ground that the aggregate value of clearances had crossed the prescribed limit by including the value of branded goods manufactured on payment of duty, and on the alleged footing that the factory was located in a rural area.

Analysis: The notification placed the burden on the assessee to establish entitlement to exclusion of branded clearances from the aggregate value only if the relevant condition was claimed and satisfied. The show cause notice did not contain evidence to establish that the factory was situated in a rural area, and the assessee had not claimed the benefit on that basis. The Revenue sought to disallow the exemption by relying on material not shown to have formed part of the notice stage record, without proving the factual foundation required to deny the benefit.

Conclusion: The denial of exemption was unsustainable, and the assessee was entitled to the benefit of Notification No. 9/2003-CE.

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