Exemption for footwear cleared under notification conditions upheld where retail price and marking requirements were not proved to be breached

Footwear manufactured and cleared under the relevant exemption notifications remained eligible for relief because the record did not show breach of the prescribed retail sale price limits or failure to meet the later marking condition. The department also did not substantiate the basis for demanding duty under section 11A, and the show cause notices contained inconsistent claims on MRP and the mode of clearance. On the facts, the notification conditions were satisfied, so the duty demand, penalties, and related orders were unsustainable.

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Issues: Whether the footwear manufactured and cleared by the appellant satisfied the conditions of the exemption notifications and was therefore not liable to duty demand, penalty, and interest.

Analysis: The exemption notifications applicable to footwear were conditioned on the retail sale price not exceeding the prescribed limits and, after the relevant date, on compliance with the marking requirement. The record did not establish that the goods were sold at a price above the declared retail sale price, or that the statutory conditions for denial of exemption were otherwise proved. The show cause notices also contained inconsistent assertions on the MRP and the manner of clearance, and the department failed to substantiate the basis for demanding duty under section 11A. On the facts, the appellant had fulfilled the notification conditions.

Conclusion: The footwear was eligible for the benefit of the exemption notifications and the duty demands, penalties, and related orders were unsustainable.

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