End-use verification under exemption notification not required once thinners cleared from licensed premises, supporting concessional duty benefit

An L-6 licence holder received benzene and toluene at a concessional duty rate under Notification No. 75/84-C.E. and used them to manufacture thinners cleared from the licensed premises. Once the thinners were removed from the premises, the appellate authority held that the notification conditions were satisfied and no further end-use verification was required. In the absence of any contrary material from the Revenue, the exemption was upheld and the demand was found unsustainable.

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Issues: Whether the benefit of Notification No. 75/84-C.E. was available to the assessee and whether end-use verification was required for benzene and toluene received under an L-6 licence and used in the manufacture of thinners.

Analysis: The assessee was an L-6 licence holder and had received benzene and toluene on payment of duty at the concessional rate under Notification No. 75/84-C.E. The goods were used in the manufacture of thinners, and it was not disputed that the thinners were cleared from the premises. The appellate authority found that, once thinners were removed from the L-6 premises, no further end-use verification was necessary and the conditions of the exemption notification stood satisfied. The Revenue did not produce any material to dislodge these findings.

Conclusion: The benefit of the exemption notification was rightly allowed and the demand was not sustainable.

Final Conclusion: The Revenue's appeal was rejected and the order granting relief to the assessee was sustained.

Ratio Decidendi: Where goods are received under an exemption notification by an L-6 licence holder and are used in the manufacture of thinners cleared from the licensed premises, compliance with the notification is established and no further end-use verification is required absent contrary evidence.

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