Late production of DMRC eligibility certificate treated as procedural lapse; central excise exemption could not be denied.

Exemption from central excise duty was not to be denied merely because the DMRC eligibility certificate was produced late or in copy form, where the goods were shown to have been cleared for use in the DMRC project and the substantive conditions of the notification were satisfied. The requirement to produce the certificate before clearance was treated as directory on these facts, and the late filing was regarded as a procedural lapse rather than a failure of entitlement. The demand, interest, and penalty were therefore unsustainable.

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Issues: Whether exemption from central excise duty could be denied merely because the required DMRC certificate was produced late or in copy form, when the goods were otherwise shown to have been cleared for use in the DMRC project and the substantive conditions of the notification were satisfied.

Analysis: The goods were admittedly cleared to DMRC for use in the project, and the certificates evidencing eligibility were produced before the adjudicating authority along with material showing that they had earlier been sent by certificate of posting. The dispute, therefore, related only to the timing and mode of production of the certificate. The notification condition requiring production of the certificate before clearance was treated as directory in the facts of the case, because the substantive entitlement to exemption was established. The delay in producing the certificate was held to be a procedural lapse. Reliance was also placed on the Tribunal's earlier decision in the appellant's own case, where late production of the essentiality certificate was held not to justify denial of exemption.

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

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