Exemption denial cannot rest only on silence to notice; independent reasons and fresh adjudication were required.

Denial of Notification No. 203/92 could not be sustained merely because no reply was filed to the show cause notice; independent reasons were required to explain why the exemption was unavailable. The record also suggested a prima facie claim that the exported final products were not dutiable and that no Modvat credit had been taken on the inputs, with supporting certificates produced before the Tribunal. On that basis, the impugned order was set aside and the matter was remanded to the Commissioner for fresh adjudication in accordance with law after considering the appellant's submissions.

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Issues: Whether the denial of the benefit of Notification No. 203/92 and the consequent duty demand could be sustained merely because no reply was filed to the show cause notice, and whether the matter required fresh consideration by the Commissioner.

Analysis: The order denying the notification benefit was based on the appellant's failure to reply to the notice. That circumstance, by itself, was held insufficient to uphold the denial. Independent reasons were required to be recorded on why the exemption was not available. The record also indicated a prima facie claim that the exported final products were not dutiable and that no Modvat credit had been taken on the inputs, supported by certificates placed before the Tribunal.

Conclusion: The appeal was allowed, the impugned order was set aside, and the matter was remanded to the Commissioner for adjudication in accordance with law after considering the appellant's submissions.

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