End-use proof controls exemption under the notification; a mere intended-use claim or licence is not enough.

An exemption notification for benzene, toluene and xylene applied only on proof to the satisfaction of the Assistant Collector that the goods were used for the specified intended purpose. Where the goods were used outside the factory of production, compliance with Chapter X of the Central Excise Rules, 1944 was required. A mere claim of intended use, or possession of a licence alone, was insufficient; the assessee had to produce the user certificate or other evidence of actual end use for manufacture of the specified products before the benefit could be claimed.

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Issues: Whether the respondent was entitled to exemption under the notification dated 1 March 1984 for Benzene, Toluene and Xylene without proving their actual use for the specified intended purpose.

Analysis: The notification made the exemption conditional upon proof to the satisfaction of the Assistant Collector that the goods were used for the intended purpose, and where use was elsewhere than the factory of production, compliance with Chapter X of the Central Excise Rules, 1944 was required. The intended use against the goods was as solvent, diluent or thinner for manufacture of paints, varnishes, lacquers and allied materials. The respondent did not produce the user certificate and led no other evidence to show actual use in the manufacture of the specified products. The exemption could not be granted on a mere claim of intended use or on the basis of a licence alone.

Conclusion: The respondent was not entitled to the exemption, and the denial of the benefit of the notification was /valid.

Final Conclusion: The appeal succeeded and the exemption claim failed for want of proof of actual end use in accordance with the notification conditions.

Ratio Decidendi: Where an exemption notification makes relief conditional on proof of actual end use, the assessee must adduce evidence satisfying the prescribed authority of such use before the benefit can be availed.

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