Non-availment of Modvat credit under customs exemption was remanded for fresh adjudication after inadequate verification.

Benefit under Notification No. 203/92-Cus. could not be denied solely on an untested allegation that the non-availment of Modvat credit condition had been breached, particularly where the record already contained a certificate from the jurisdictional Central Excise authorities stating that credit had not been taken and the appellant asserted that the relevant credit position could be specifically shown. A separate objection based on rebate of duty, not raised in the notice, was not fit to be introduced without proper examination. The matter was therefore sent back for fresh adjudication by the jurisdictional Commissioner after personal hearing.

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Issues: Whether the benefit of Notification No. 203/92-Cus. could be denied on the allegation that the condition regarding non-availment of Modvat credit had been breached, and whether the matter required fresh examination by the adjudicating authority.

Analysis: The allegation rested on an asserted contravention of condition v(a) of the notification. The record before the adjudicating authority included a certificate from the jurisdictional Central Excise authorities stating that credit had not been availed, and the appellant indicated that the credit position for the relevant licence could be specifically demonstrated. The notice did not allege the separate basis relied upon by the Commissioner regarding rebate of duty, and that issue was therefore not fit to be introduced at that stage without proper examination.

Conclusion: The appeal was allowed and the matter was remitted to the jurisdictional Commissioner for de novo adjudication after granting the appellants an opportunity of personal hearing.

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