Exemption under Notification No. 203/92-Cus. cannot be denied when licence records and evidence show non-availment of Modvat credit.

Benefit under Notification No. 203/92-Cus. could not be denied where the supporting manufacturer's name had been incorporated in the advance licence and the record established non-availment of Modvat credit. The appellant produced the Joint Chief Controller's letter confirming incorporation of the supporting manufacturer's name, and the invoices, together with prior verification by the Commissioner, Export Promotion, showed that no duty had been paid and Modvat credit had not been taken. On that factual basis, the exemption denial was unsustainable and the impugned order was set aside.

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Issues: Whether the benefit of Notification No. 203/92-Cus. could be denied on the grounds that the supporting manufacturer's name was not incorporated in the advance licence and that no certificate was produced to show non-availment of Modvat credit by the supporting manufacturer.

Analysis: The appellant produced the Joint Chief Controller's letter showing incorporation of the supporting manufacturer's name in the licence. On the question of Modvat credit, the invoices showed that no duty had been paid by the supporting manufacturer, and a prior verification by the Commissioner, Export Promotion, had found that the supplier had not availed Modvat credit. These materials removed the factual basis on which exemption had been denied.

Conclusion: The denial of the exemption was unsustainable and the impugned order was set aside.

Ratio Decidendi: An exemption under Notification No. 203/92-Cus. cannot be denied when the supporting manufacturer's name stands incorporated in the licence and the record establishes non-availment of Modvat credit by the supporting manufacturer.

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