Procedural lapse in export formalities cannot sustain excise duty demand or penalty when actual export is established.

Where export of goods is established, central excise duty demand and penalty cannot be sustained merely for procedural lapses in export formalities. The record showed that the goods were cleared under bond and later regularised by Customs endorsements, while the only dispute concerned the absence of prior approval or the presence of Central Excise officers at export. In those circumstances, the procedural requirement could be relaxed, and a mere irregularity in the export process did not justify confirmation of duty or penalty when the export itself was admitted.

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Issues: Whether central excise duty and penalty could be sustained when the goods were actually exported and the dispute related only to procedural non-compliance in the export clearances.

Analysis: The export of the goods was admitted by the departmental authorities, and the record showed that the goods had been cleared under bond, with provisional documents prepared and later regularised by Customs endorsements. The dispute was confined to the absence of prior approval or attendance of Central Excise officers at the time of export. In such a situation, the procedural requirement could be relaxed, and mere irregularity in following the export procedure did not justify confirmation of duty demand or penalty when the export itself stood established.

Conclusion: The duty demand and penalty were not sustainable and the assessee succeeded.

Ratio Decidendi: Where export of goods is established and the only defect is a procedural lapse in export formalities, the procedural requirement may be relaxed and no excise duty demand or penalty can be upheld solely on that basis.

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