Procedural lapse in Form I and countersignature could not defeat concessional duty exemption where end-use was proved.

Failure to obtain Form I and the countersignature under the concessional removal procedure was treated as a procedural lapse, not a substantive breach, where the goods were cleared under ARE-3 forms, receipt was endorsed by the consignee-end officers, and the recipient units actually used the goods for the intended purpose and exported the finished products. Because the essential conditions for the concessional benefit were satisfied, the omission could not justify denial of exemption or support the duty demand. On that basis, the demand, interest, and penalties were not sustainable.

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Issues: Whether failure to obtain Form I and countersignature under the concessional removal procedure disentitled the assessee from duty exemption when the goods were actually received by the intended recipients and used for the intended purpose.

Analysis: The goods were cleared under ARE-3 forms, the consignee-end officers endorsed receipt of the consignments, and there was no dispute that the recipient units used the goods and exported the finished products. In these circumstances, the requirement relating to Form I and countersignature was treated as procedural rather than substantive. Since the essential conditions for the concessional benefit stood satisfied, the omission could not justify denial of exemption or sustain the duty demand.

Conclusion: The issue was decided in favour of the assessee. The demand, interest, and penalties could not be sustained.

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