Substantive exemption conditions prevail over procedural lapses where actual receipt and use for power generation are proved.

Exemption benefit under the relevant notifications was upheld where the goods were actually received by the power house, entered in its register, and used for generation of electricity for public supply. Although the consignment moved under GP-1 instead of the Chapter X procedure and was not directly consigned in the prescribed manner, the Tribunal treated this as a procedural lapse only. Because the substantive conditions of the exemption were proved on the record, the technical breach did not defeat the refund claim. The refusal of refund was therefore set aside, and consequential relief followed.

---

---

Issues: Whether the appellants were entitled to refund and exemption benefit under the exemption notifications despite the consignment having been moved under GP-1 instead of the Chapter X procedure and not being directly consigned to the licence-holder power house.

Analysis: The exemption notifications covered LDO consignments used for generation of electricity for public supply in power generating stations. The record included an uncontested certificate from the Central Excise authorities showing that the disputed quantity was actually received by the Bihar State Electricity Board power house, duly entered in its register, and used for power generation. The procedural omission in not preparing GP-2 and following Chapter X was treated as an error, but the substantive conditions for exemption were found to have been fulfilled. The Tribunal held that a technical breach of the procedure did not by itself defeat the exemption where actual receipt and actual use for the notified purpose stood proved.

Conclusion: The appellants satisfied the exemption conditions in substance and were entitled to the refund claim.

Final Conclusion: The refusal of refund was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where the substantive conditions of an exemption notification are proved to have been met, a mere procedural lapse in following the prescribed movement procedure will not defeat the exemption benefit.

---