Material evidence and DGFT clarification must be considered before denying exemption; matter remanded for fresh adjudication.

Denial of the exemption could not be sustained where the lower authorities had not examined the test reports and DGFT clarification relied upon by the appellants, as those documents went to the root of the dispute over the nature and use of the imported polyester fabric. Because the Tribunal did not express any view on the merits of that material and the controversy could not be resolved on the existing record, the proper course was remand. The matter was therefore sent back to the original adjudicating authority for fresh consideration of the documents and for a speaking order after hearing the appellants.

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Issues: Whether the denial of exemption could be sustained without considering the test reports and the DGFT clarification produced by the appellants, and whether the matter required remand for fresh adjudication.

Analysis: The appellate record showed that the lower authorities had not considered the material documents relied upon by the appellants, particularly the test reports and the DGFT clarification, which went to the root of the controversy regarding the nature and use of the imported polyester fabric. Since those documents were not examined at the original stage, and the Tribunal did not express any view on their merits or applicability, the controversy could not be finally resolved on the existing record. The matter therefore required reconsideration by the original adjudicating authority.

Conclusion: The matter was remanded to the original adjudicating authority for fresh consideration of the documents and for passing a speaking order after hearing the appellants.

Final Conclusion: The appeals succeeded to the extent of setting aside the impugned order and directing a de novo decision on the disputed exemption claim.

Ratio Decidendi: Where material evidence going to the root of the dispute has not been considered by the lower authorities, the proper course is remand for fresh adjudication rather than a final determination on merits.

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