Exemption claims cannot be denied solely for delayed certificates; factual eligibility disputes require fresh scrutiny on remand.

Exemption under the notifications could not be denied solely because supporting certificates were produced after clearance, as the certificate requirement was treated as directory and delayed production was not a sufficient ground for rejection. Where the recipient societies were alleged to be non-existent, or where utilisation of yarn on handlooms was not properly verified, the exemption claim turned on factual scrutiny that required reconsideration by the adjudicating authority. The denial of exemption on the stated grounds was therefore set aside and the matter remitted for fresh decision.

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Issues: (i) Whether exemption under the notifications could be denied merely because the requisite certificates were produced after clearance of the goods; and (ii) whether the exemption claim required re-examination where the recipient societies were alleged to be non-existent or where utilisation of yarn on handlooms was not properly verified.

Issue (i): Whether exemption under the notifications could be denied merely because the requisite certificates were produced after clearance of the goods.

Analysis: The delayed production of certificates was held not to be a sufficient ground to reject the exemption claim, as the requirement was treated as directory in the light of the cited precedent. The benefit of the notifications could not be denied solely on that basis.

Conclusion: The objection based only on post-clearance production of certificates was rejected and did not justify denial of exemption.

Issue (ii): Whether the exemption claim required re-examination where the recipient societies were alleged to be non-existent or where utilisation of yarn on handlooms was not properly verified.

Analysis: The orders for supply were placed by NHDC, the goods were sent under its instructions, and payment was also made by NHDC. The notifications were read as not plainly casting a duty on the supplier to ensure actual utilisation by each society. Since the factual position regarding the existence of the societies and the supporting certificates required scrutiny, the matter was considered fit for fresh examination by the adjudicating authority.

Conclusion: The exemption issue on these factual aspects required reconsideration by the adjudicating authority.

Final Conclusion: The denial of exemption could not stand on the stated grounds without proper factual scrutiny, so the impugned order was set aside and the matter remitted for fresh decision.

Ratio Decidendi: An exemption claim under a notification cannot be denied solely for delayed production of supporting certificates where the substantive conditions are otherwise in issue, and factual disputes bearing on eligibility must be examined on remand.

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