End-use exemption under Notification No. 75/84 requires proof of actual use before duty and penalty are redetermined.

A departmental appeal was found maintainable because the record contained a Board direction authorising the Collector to file it. On the exemption issue, Notification No. 75/84 was treated as an end-use based exemption requiring actual use of benzene and toluene for the declared purpose. As the manufacturer did not establish such use and the department relied on a statement indicating non-use, the exemption claim was not accepted on the existing record. Duty liability was directed to be redetermined on all relevant facts, and penalty was to be considered only after that fresh adjudication.

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Issues: (i) Whether the departmental appeal was maintainable on the strength of the Board's direction; (ii) Whether exemption under Notification No. 75/84 depended on actual use of benzene and toluene for the declared intended use, and whether the duty and penalty required fresh determination on all relevant facts.

Issue (i): Whether the departmental appeal was maintainable on the strength of the Board's direction.

Analysis: The record showed a Board's order directing the Collector to file the appeal. That direction satisfied the requirement for institution of the departmental appeal.

Conclusion: The appeal was held to be maintainable.

Issue (ii): Whether exemption under Notification No. 75/84 depended on actual use of benzene and toluene for the declared intended use, and whether the duty and penalty required fresh determination on all relevant facts.

Analysis: The notification was treated as an end-use based exemption requiring the goods to be used for the declared purpose. The Tribunal distinguished the earlier relied-on precedent on facts and held that, where the manufacturer failed to show actual use and the department relied on the proprietor's statement of non-use, the full duty liability had to be redetermined on all relevant aspects. Penalty could be considered only after such redetermination.

Conclusion: The exemption claim was not accepted on the existing record, and the duty and penalty issues were sent back for fresh adjudication.

Final Conclusion: The departmental challenge succeeded to the extent that the matter was sent back for a fresh decision on duty liability and penalty after considering all relevant facts and the applicable law.

Ratio Decidendi: Where an exemption is conditioned on intended use, actual use in accordance with that declared purpose must be established, and failure to do so permits duty liability to be redetermined on merits before penalty is assessed.

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