Customs exemption cannot be denied on suspicion where export obligation is certified fulfilled and no contrary evidence exists.

Notification No. 160/92-Cus. required fulfilment of the export obligation and a prescribed declaration that the exported goods were manufactured from the imported capital goods. The Board circular was limited to a declaration and supporting statement and did not require Customs to conduct independent verification absent contrary material. Where the licensing authority had certified that the export obligation was fulfilled and Customs produced no evidence to rebut that certificate or the importer's explanation, Customs could not deny the exemption or reopen the matter merely on suspicion. The denial of exemption was therefore unjustified and the Revenue's appeal failed.

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Issues: Whether, under Notification No. 160/92-Cus., the Customs authorities could deny exemption and reopen the matter on the ground that the exported goods were not shown to have been manufactured from the imported capital goods, despite fulfilment of export obligation and issuance of a certificate by the licensing authority.

Analysis: The notification required the importer to fulfil export obligation and furnish the prescribed declaration regarding manufacture of exported goods using the imported capital goods. The relevant Board circular only called for a declaration and supporting statement confirming such use; it did not mandate independent verification by Customs in the absence of contrary material. The export obligation had been certified as fulfilled by the licensing authority, and no evidence was brought by Customs to dislodge that certificate or the assessee's explanation. In these circumstances, the Customs authorities could not substitute their own view for the licensing authority's certificate or deny the benefit merely on suspicion.

Conclusion: The denial of exemption was not justified, and the appeal by Revenue failed.

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