Procedural compliance for exemption under fiscal notifications is mandatory; Tribunal order set aside and matter remitted for reconsideration.

Where exemption under a fiscal notification is conditional on compliance with a prescribed procedural scheme, that procedure cannot be treated as merely evidentiary or optional. The SC reiterated that Chapter X was intended to secure compliance with the statutory process and prevent diversion or misutilisation of excisable goods, so exemption is available only on satisfaction of the prescribed preconditions. Because the Tribunal had proceeded on the contrary footing and ignored the governing Constitution Bench law, its order could not stand. The matter was therefore set aside and remitted for fresh consideration in accordance with the correct legal standard.

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Issues: Whether the Tribunal's order allowing exemption without proper observance of Chapter X procedure was liable to be set aside and the matter remitted for fresh consideration in light of the governing law.

Analysis: The appeals arose from a common order of the Tribunal which proceeded on the view that Chapter X was meant only to establish receipt of goods and their utilisation. A Constitution Bench had already held that the object of Chapter X is to ensure compliance with the prescribed procedure and to prevent diversion and misutilisation of excisable goods, and that exemption cannot be treated as available apart from the prescribed pre-conditions. The record showed that the Tribunal had adopted the same erroneous approach in the present matters. In consequence, the earlier order could not stand and the dispute required reconsideration by the Tribunal in accordance with the law declared by the Constitution Bench.

Conclusion: The Tribunal's order was set aside and the matters were remitted for de novo consideration in accordance with law.

Final Conclusion: The appeals succeeded to the extent of securing reversal of the Tribunal's order and a remand for fresh adjudication under the governing exemption and procedural framework.

Ratio Decidendi: Where exemption under a fiscal notification is conditioned on compliance with a prescribed procedural scheme, a tribunal cannot treat the procedure as merely evidentiary or ignore it; an order founded on that misconception is liable to be set aside and the matter remitted for reconsideration under the correct legal standard.

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