Excise exemption disputes turn on factual adjudication, so exemption claims must be decided on evidence before the competent authority.

Entitlement to excise duty exemption under Notification No. 59/1994 depended on disputed factual questions, including the nature and classification of the goods and the effect of use of the same brand name by different units. Because those matters had not been examined on evidence by the adjudicating authority, the High Court held that the exemption claim could not be conclusively decided in writ proceedings. The merits findings of the Single Judge were set aside and the matter was remitted to the Assistant Collector for fresh adjudication after hearing the appellants.

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Issues: Whether the appellants' claim to exemption from excise duty under Clause (4) of Notification No. 59 of 1994-Central Excise could be decided without adjudication of the factual controversy regarding the nature of the goods manufactured and the use of brand names, and whether the matter was liable to be remitted to the adjudicating authority.

Analysis: The entitlement to the exemption depended upon disputed facts, including the classification of the goods and the effect of use of the same brand name by different manufacturing units. As the adjudicating authority had not applied its mind to these matters and no evidentiary adjudication had been made, the issue could not be conclusively determined in writ proceedings on merits. The findings recorded by the learned Single Judge on the exemption claim were therefore unsustainable.

Conclusion: The findings on merits were vacated and the matter was remitted to the Assistant Collector of Customs for fresh adjudication after giving the appellants an opportunity of hearing.

Ratio Decidendi: Where entitlement to an excise exemption turns on disputed questions of fact, the issue must be determined by the competent adjudicating authority on evidence and not finally decided without such adjudication.

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