Export compliance and Cenvat credit cannot be denied for an internal endorsement lapse when export of goods is otherwise proved.

Export of goods to Nepal was proved through shipping bills, land customs station clearance and bank realisation certificates, so duty demand and denial of Cenvat credit could not be sustained merely because the duplicate invoice endorsement required by the notification was not routed through the departmental channel. The Tribunal treated the endorsement and transmission of the duplicate copy as an internal procedural step in which the exporter had no role. As the alleged lapse arose from departmental procedure rather than any failure by the exporter, the demand, credit denial and penalties were set aside.

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Issues: Whether the demand of duty, denial of Cenvat credit, and imposition of penalty could be sustained when the goods were exported to Nepal and the exporter had produced shipping bills, exit permission, and proof of payment, but the duplicate invoice endorsement required under the notification was not routed through the departmental channel.

Analysis: The goods were exported under shipping bills, the land customs station permitted export, and bank realisation certificates were produced. The only objection was non-production of the duplicate copy contemplated by the notification. The Tribunal held that the prescribed endorsement and transmission of the duplicate invoice were part of the departmental procedure and internal correspondence, and the exporter had no role in that process. Since the export itself stood proved and the alleged lapse was attributable to the department's procedure, duty could not be demanded and credit could not be denied.

Conclusion: The demand of duty, denial of Cenvat credit, and penalties were set aside in favour of the assessees.

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