Alternative small scale exemption claim cannot be denied for absence of prior declaration; input credit needs documentary verification.

A small scale exemption claim raised only as an alternative plea after denial of another exemption was not rejected merely because no prior declaration had been filed, since the assessee had not attempted to avail the exemption in the ordinary course without compliance; the Revenue's challenge on that ground failed. Input duty credit was treated as dependent on production of duty-paying documents, so the claim was remanded for verification, with admissibility to be decided after examination of the documents and hearing the assessee. The note thus affirms the exemption claim while leaving the credit issue open for reconsideration on supporting records.

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Issues: (i) whether the assessee could be denied small scale exemption for want of a declaration when the claim was raised as an alternative plea after denial of another exemption; (ii) whether the assessee was entitled to credit of duty paid on inputs, subject to production of duty-paying documents.

Issue (i): whether the assessee could be denied small scale exemption for want of a declaration when the claim was raised as an alternative plea after denial of another exemption.

Analysis: The assessee had not begun availing the small scale exemption in the ordinary course without compliance. The claim arose only as an alternative request after the earlier exemption was denied. In that situation, the absence of a prior declaration was not treated as a ground to reject the exemption claim.

Conclusion: The denial of small scale exemption on the ground of non-filing of declaration was not sustained and the Revenue's appeal failed.

Issue (ii): whether the assessee was entitled to credit of duty paid on inputs, subject to production of duty-paying documents.

Analysis: The credit claim depended on proof through duty-paying documents. The matter therefore required verification of the relevant documents before the credit could be granted, and the assessee was directed to produce them within the time allowed.

Conclusion: The credit issue was sent back for verification, with the adjudicating authority to decide admissibility after considering the documents and hearing the assessee.

Final Conclusion: The order upheld the assessee's entitlement to small scale exemption while leaving the input credit claim open for reconsideration on production of supporting documents.

Ratio Decidendi: A small scale exemption claim raised as an alternative plea after denial of another exemption cannot be rejected merely for absence of a prior declaration, and input credit may be examined afresh on production of duty-paying documents.

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