Technical expert evidence can establish exemption eligibility, and unsupported suspicion cannot sustain duty, interest, or penalty demands.

Eligibility for exemption under Notification No. 33/99-C.E. depended on proof of a 30% increase in manufacturing capacity, and that requirement was satisfied by the Chartered Engineer's certificate and report showing that new machinery caused the increase. In the absence of any contrary expert opinion or rebuttal material from the Revenue, the technical report could not be discarded on suspicion or by a subjective view of the adjudicator. On that basis, the exemption was available and the consequential demand of duty, interest and penalty could not be sustained.

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Issues: Whether the assessee was entitled to exemption under Notification No. 33/99-C.E. dated 8-7-1999 on the basis of the Chartered Engineer's certificate and report showing increase in manufacturing capacity by 30%, and whether duty, interest and penalty could be sustained.

Analysis: The capacity increase claimed by the assessee was supported by the Chartered Engineer's certificate and report, which specifically recorded that the addition of new machinery resulted in a minimum 30% increase in capacity. The Revenue did not produce any contrary expert opinion or other material to discredit the technical report. In the absence of rebuttal evidence, the expert opinion could not be discarded merely on suspicion or on the adjudicator's own view of the matter. Once eligibility to the exemption notification was established, the consequential demand of duty, interest and penalty could not survive.

Conclusion: The assessee was entitled to the exemption, and the duty demand, interest and penalty were unsustainable.

Ratio Decidendi: Technical expert evidence supporting eligibility to an exemption cannot be rejected on mere suspicion without contrary expert material on record.

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