Export under bond remains duty-free where procedural compliance lapses do not affect substantive entitlement.

Goods cleared under bond for job work and actually exported were treated as not liable to duty where departmental permission had been obtained and the Revenue did not dispute export. The commentary notes that the applicable Board circulars supported execution of the bond in the manner adopted, so a procedural departure from Notification No. 43/2001-C.E. (N.T.) did not defeat the substantive export-based entitlement. On that footing, the demand was held unsustainable and the procedural objection alone was insufficient to justify levy on the exported goods.

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Issues: Whether goods cleared under bond for job work and ultimately exported were liable to duty merely because the procedure under Notification No. 43/2001-C.E. (N.T.) was alleged not to have been strictly followed.

Analysis: The goods were cleared under bond with departmental permission and the final products were exported, a factual position not disputed by the Revenue. The applicable Board circulars also supported the permissibility of execution of bond in the manner adopted. In such circumstances, the exported goods did not attract duty, and the procedural objection did not dislodge the substantive entitlement flowing from export.

Conclusion: The issue is decided in favour of the assessee. The demand was not sustainable and the Revenue's challenge failed.

Ratio Decidendi: Where goods are cleared under bond with departmental permission and are actually exported, a procedural deviation in the manner of compliance does not by itself justify levy of duty on the exported goods.

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