Exemption cannot be denied for procedural lapses unless the notification itself makes the requirement mandatory.

Exemption under a notification cannot be denied for failure to maintain a particular register or follow a trade notice procedure unless the notification itself expressly makes that compliance a condition precedent. The Tribunal held that Notification No. 432/86 did not require a separate account of inputs and finished products, and the trade notice relied on by the department was issued in the context of Modvat credit under Rule 57A, not for enforcing the exemption. On that basis, the alleged procedural lapse did not justify withholding the benefit, and the departmental appeal failed.

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Issues: Whether exemption under Notification No. 432/86 could be denied merely because the assessee did not maintain a particular register or follow the procedure stated in the trade notice, notwithstanding that the notification itself did not prescribe such a condition.

Analysis: The assessee had initially taken Modvat credit under Rule 57A, but the dispute before the Tribunal was whether it could instead obtain the benefit of Notification No. 432/86 despite the department's objection that a separate account of inputs and finished products had not been maintained and that the procedure in Trade Notice No. 77/92 had not been followed. The Tribunal applied the earlier principle that exemption cannot be denied on the basis of a register requirement unless the notification itself makes such maintenance a condition precedent. It found that Notification No. 432/86 contained no requirement to maintain any particular register. It further held that the trade notice, on the department's own showing, was issued in connection with Modvat credit under Rule 57A and not for enforcing the exemption under Notification No. 432/86.

Conclusion: The exemption could not be denied on the alleged procedural lapse, and the departmental appeal failed.

Ratio Decidendi: An exemption under a notification cannot be withheld for non-compliance with a procedural requirement unless that requirement is expressly prescribed by the notification itself.

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