Evidentiary burden in exemption claims: mouth-blown glass tubes qualified for exemption when revenue produced no contrary proof.

Glass tubes manufactured before 01.04.2007 by the mouth-blowing process were treated as eligible for exemption under Notification No. 6/2002-CE, because the assessee supported its claim with a purchase bill, employee statements and labour proceedings. The department failed to verify the seller's records or produce contrary evidence showing use of the compressor before 01.04.2007, and the bill could not be rejected merely because it was dated the last day of the financial year. On that evidentiary basis, the earlier manufacturing process was accepted and the exemption remained available up to 31.03.2007.

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Issues: Whether glass tubes manufactured prior to 01.04.2007 by the mouth-blowing process were eligible for exemption under Notification No. 6/2002-CE dated 01.03.2002 and whether the department could displace the assessee's evidence on the basis of assumptions.

Analysis: The assessee produced a purchase bill showing that the compressor was bought only on 31.03.2007, together with employee statements and labour proceedings supporting the claim that glass tubes had earlier been manufactured by the mouth-blowing process. The revenue did not conduct any verification at the seller's end and brought no contrary evidence to establish use of the compressor before 01.04.2007. The rejection of the bill merely because it bore the last date of the financial year was held to rest on presumption rather than evidence. On that material, the earlier process was accepted as mouth-blowing and the corresponding exemption was available up to 31.03.2007.

Conclusion: The exemption claim for the period prior to 01.04.2007 was accepted in favour of the assessee.

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