Separate records requirement may be met by non-interrelated accounts in one register, with exemption claims remitted for fresh factual review.

Separate records required by a notification may be satisfied by distinct, non-interrelated accounts maintained in the same register, because the requirement is one of substance rather than physical form. Physical maintenance in separate books is not indispensable if the two categories of transactions are kept apart. Where the factual basis for exemption, including supporting documents for Bhutan sales, has not been independently examined, the entitlement cannot be finally determined on the existing record and the matter should be remitted for fresh consideration on the evidence produced.

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Issues: (i) whether the requirement in the notification dated 2 August 2002 to keep separate records for the relevant purchases was satisfied when separate accounts were maintained in the same register but were not inter-related; and (ii) whether the claim for exemption in respect of tea sales to Bhutan could be finally determined on the existing record or required reconsideration on remand.

Issue (i): Whether the requirement in the notification dated 2 August 2002 to keep separate records for the relevant purchases was satisfied when separate accounts were maintained in the same register but were not inter-related.

Analysis: The record requirement was treated as one of substance rather than form. Separate accounts pertaining to the two categories of transactions, if maintained without reference to each other and without being merged into one common set of accounts, could amount to separate records even if entered in the same book. Physical maintenance in two distinct registers was not treated as indispensable. The factual question, however, had not been properly examined by the Board.

Conclusion: The assessee's mode of maintenance could satisfy the notification, but the entitlement to exemption could not be finally affirmed without a fresh factual examination.

Issue (ii): Whether the claim for exemption in respect of tea sales to Bhutan could be finally determined on the existing record or required reconsideration on remand.

Analysis: The existing order did not show that the Board had assessed the sufficiency of the documents relating to the Bhutan transactions or addressed whether the material produced was conclusive of export. Since the matter involved appreciation of evidence and the Board had not independently examined the relevant documents, the dispute was remitted for a fresh decision on the evidentiary basis.

Conclusion: The issue was remanded to the Board for fresh consideration and the claim could be allowed or disallowed in accordance with law on the basis of the material produced.

Final Conclusion: The assessee obtained partial relief because the adverse findings on both disputed exemption issues were set aside and the matters were sent back for fresh adjudication.

Ratio Decidendi: A compliance requirement to maintain separate records may be satisfied by distinct, non-interrelated accounts kept in the same register, and where the factual basis for exemption has not been independently examined, the matter should be remanded for fresh consideration rather than finally decided.

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