Exemption under Notification No. 58/97-C.E. allowed where inputs were paid for by bank demand draft through letter of credit.

Notification No. 58/97-C.E. allowed payment for inputs by cheque drawn on the assessee's own bank account, bank draft, or banker's cheque. The key issue was whether payment through a bank demand draft under a letter of credit satisfied this condition. The record, including the bank certificate, showed that the consignments were paid for by bank demand draft and that the notification did not require the draft to be drawn from the assessee's own account. The appellants therefore met the notification requirement and were entitled to the exemption.

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Issues: Whether the appellants were entitled to exemption under Notification No. 58/97-C.E. when payment for the inputs was made by bank demand draft through letter of credit and not by cheque drawn on the assessee's own bank account.

Analysis: The notification permitted payment by cheque drawn on the assessee's own bank account, by bank draft, or by banker's cheque. The record showed that the consignments were paid for through bank demand draft and the bank certificate supported compliance with the notification conditions. There was no requirement in the notification that a bank draft must be drawn from the assessee's own account.

Conclusion: The appellants satisfied the notification condition and were entitled to the exemption.

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