Subsisting entitlement certificate bars denial of exemption on an assessing officer's separate view of manufacturing status.

A valid and subsisting entitlement certificate under the incentive scheme bound the assessing officer, and exemption could not be denied on an independent view that the activity was not manufacturing. Section 41C provided that exemption would cease only on cancellation or expiry of the certificate, and the power to cancel or question its validity lay with the statutory authority under the Act. As the certificate remained uncancelled and operative, the assessee continued to receive exemption benefits for the covered activity.

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Issues: Whether the respondent was entitled to exemption benefits under the entitlement certificate so long as the certificate remained in force, notwithstanding the revenue's contention that the activity undertaken did not amount to manufacturing.

Analysis: The entitlement certificate was undisputedly in force and covered the relevant milk and milk products activity. Section 41C provided that exemption would cease only upon cancellation or expiry of the certificate, and also prescribed the authority competent to cancel it. As the certificate had not been cancelled, the assessing officer could not ignore or override it by independently examining whether the activity amounted to manufacturing. The power to question the validity of the certificate lay with the statutory authority under the Act, not with the assessing officer.

Conclusion: The respondent remained entitled to exemption benefits for so long as the entitlement certificate was operative, and the issue was answered in favour of the assessee.

Ratio Decidendi: A valid and subsisting entitlement certificate under the incentive scheme binds the assessing officer, and exemption cannot be denied on the basis of an independent view that the activity is not manufacturing unless the certificate is cancelled in the manner provided by the statute.

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