Substantive exemption cannot be denied for delayed certificate production when eligibility was already satisfied and genuineness was undisputed.

Exemption under Notification No. 64/95 could not be denied merely because the prescribed certificate was produced after clearance, where the invoice referred to the certificate number and date, the certificate was already in existence at removal, and its genuineness was not disputed. The delayed production was only a procedural lapse and did not negate substantive eligibility for exemption. On that basis, the demand and penalty were unsustainable, and the exemption benefit was upheld.

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Issues: Whether exemption under Notification No. 64/95 could be denied merely because the prescribed certificate was produced after clearance of the goods, when the certificate had in fact been in existence and its genuineness was not disputed.

Analysis: The goods were supplied to the Indian Navy for construction of a warship and the invoice itself referred to the certificate number and date, indicating that the appellant was already in possession of the requisite certificate at the time of removal. The Department did not dispute the veracity of the certificate. The subsequent production of the certificate along with the return showed only a procedural lapse and not a case where the appellant had obtained the certificate after clearance. In such circumstances, denial of exemption on a purely technical ground was unwarranted.

Conclusion: The exemption could not be denied on the ground of delayed production of the certificate, and the demand and penalty were unsustainable.

Final Conclusion: The appellate order was set aside and the appeal was allowed, granting the appellant the benefit of the exemption notification.

Ratio Decidendi: A substantive exemption cannot be denied for a merely technical or procedural lapse when the underlying eligibility condition is satisfied and the prescribed certificate was already in existence and proved genuine.

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