Excise exemption cannot be denied during administrative delay where the applicant substantially complied with the prescribed procedure.

A statutory excise concession conditioned on formal permission could not be denied for the period between the application and the grant of permission where the applicant had substantially complied with the prescribed procedure and maintained the necessary records. The authority's delay in disposing of the application could not be used to defeat the benefit for the intervening period, because the exemption was capable of being computed from the existing records and administrative laches could not be rewarded. The exemption was therefore available from 21 July 1967 to 31 August 1967, and the refusal for that period was unsustainable.

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Issues: Whether the petitioner was entitled to exemption from excise duty for the period between its application under Rule 56A and the grant of formal permission, and whether the authorities could deny the exemption because the permission was made operative only from the date of the order.

Analysis: The exemption notification, as amended, made availing of Rule 56A procedure a condition for claiming the concession. The petitioner had already been following a procedure substantially akin to Rule 56A and had maintained the relevant records during the interregnum. The application for permission was made on 21 July 1967, but the authorities delayed disposal until 31 August 1967. The delay could not be used to deprive the petitioner of the concession for the intervening period, because the exemption could be worked out on the basis of the records already maintained and the condition could not be read in a manner that rewarded administrative laches.

Conclusion: The petitioner was entitled to claim the exemption from 21 July 1967 to 31 August 1967, and the refusal to grant it for that period was unsustainable.

Final Conclusion: The demand and the consequential orders were quashed, and the authorities were directed to compute the exemption for the intervening period and refund the excise duty recovered from the petitioner.

Ratio Decidendi: Where a statutory concession depends on formal permission but the applicant has substantially complied with the required procedure and the authority delays disposal of the application, the authority cannot deny the benefit for the intervening period on the basis of its own delay.

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