Exemption under Notification No. 22/99-Cus upheld where trading activity and certificate negated Modvat credit availment.

Exemption under Notification No. 22/99-Cus could not be denied where the record showed that the imported goods were traded and sold under sales invoices, and the Superintendent's certificate confirmed that the importer had not availed Modvat credit under Rule 57A or passed on credit under Rule 57G. On those facts, the notification condition was treated as satisfied, so the department's objection of non-compliance did not survive. The benefit of exemption was therefore upheld.

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Issues: Whether the appellant was entitled to exemption under Notification No. 22/99-Cus when the department denied the benefit on the allegation that Modvat credit had been availed or the notification conditions were not satisfied.

Analysis: The imported goods were found to have been sold under sales invoices, and the Superintendent's certificate stated that the appellant was engaged only in trading activity and had neither availed Modvat credit under Rule 57A of the Central Excise Rules, 1944 nor passed on credit under Rule 57G of the Central Excise Rules, 1944. On these facts, the condition attached to the exemption notification stood fulfilled and the basis for denial of the benefit did not survive.

Conclusion: The denial of exemption was unsustainable and the appellant was entitled to the benefit of Notification No. 22/99-Cus.

Ratio Decidendi: Where the record shows trading of the imported goods and a competent certificate negates availment or passing on of Modvat credit, exemption cannot be denied for alleged non-compliance with the notification conditions.

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