Exemption notification compliance required fresh verification of duty-paid yarn evidence before deciding concessional duty entitlement.

Eligibility for concessional duty under Notification No. 4/97-CE depended on proof that the yarn used was duty-paid. As fresh evidence was said to have been obtained showing duty payment on the input yarn, and both sides agreed that the material should be examined, the dispute could not be finally decided on the existing record. The original authority was therefore directed to verify the documents, apply the exemption condition to the facts, and decide the matter afresh. The impugned order was set aside and the substantive issues on duty demand and penalty were kept open.

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Issues: Whether the appellant was entitled to concessional duty under Notification No. 4/97-CE dated 01.03.1997 on the basis of duty-paid yarn, and whether the matter required remand for verification of fresh evidence.

Analysis: The concession under the notification depended on proof that appropriate excise duty or additional duty had been paid on the yarn used. The demand and penalty had been sustained below because such evidence was not produced at the earlier stage. Since the appellant asserted that it had now obtained evidence supporting the duty-paid character of the input yarn, and both sides agreed that such material should be examined, the dispute could not be finally resolved on the existing record. The proper course was to have the original authority verify the documents, consider the legal position applicable to the exemption condition, and decide the matter afresh.

Conclusion: The impugned order was set aside and the matter was remanded to the adjudicating authority for fresh decision after verification of the evidence; the substantive issues were kept open.

Final Conclusion: The appeal succeeded to the extent of reopening the adjudication, with no final determination on the duty demand or penalty.

Ratio Decidendi: Where eligibility to an exemption notification depends on proof of fulfillment of a factual condition and relevant evidence is newly produced, the matter may be remitted for verification rather than decided finally on an incomplete record.

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