Procedural lapse cannot defeat exemption benefit where core eligibility is met; time-bar ground also cannot arise beyond the notice.

Refund claims under Serial No. 273 of Notification No. 12/2012-CE were not to be denied merely because the credit entry under Condition 26 was made after six months, as the condition was treated as procedural and the substantive eligibility requirements for the taxi-related concession were otherwise satisfied. The appellate authority also could not sustain rejection on limitation where time bar was not alleged in the show cause notice, and the claims were independently found to have been filed within the relevant period. The refund benefit was therefore restored.

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Issues: (i) Whether the refund claims under Serial No. 273 of Notification No. 12/2012-CE dated 17.03.2012 were liable to be rejected for non-compliance with Condition 26 merely because the credit entry was made after the period of six months. (ii) Whether the Commissioner (Appeals) could reject the refund claims on the ground of time bar when such a ground was not raised in the show cause notice.

Issue (i): Whether the refund claims under Serial No. 273 of Notification No. 12/2012-CE dated 17.03.2012 were liable to be rejected for non-compliance with Condition 26 merely because the credit entry was made after the period of six months.

Analysis: The refund claims related to motor vehicles falling under Chapter 87 and registered for use solely as taxis. The record showed that the essential factual requirements for the concessional benefit were satisfied, including payment of duty, taxi registration, and supporting documents evidencing passing on of the benefit. The delayed taking of credit in the account current was treated as a later compliance with a procedural requirement. The condition was viewed as directory in nature, and the substantive benefit of the notification could not be denied for a procedural lapse once the essential eligibility conditions stood satisfied.

Conclusion: The refund claims were not liable to be rejected on this ground and the assessee's entitlement to the notification benefit was upheld.

Issue (ii): Whether the Commissioner (Appeals) could reject the refund claims on the ground of time bar when such a ground was not raised in the show cause notice.

Analysis: The show cause notice proceeded only on alleged non-compliance with Condition 26 and did not allege rejection on limitation. The appellate finding on time bar was therefore based on a ground outside the notice. Independently, the claims were found to have been filed within the relevant period counted from the clearances covered by the refund applications, so the limitation objection was also factually unsustainable.

Conclusion: The time-bar objection was not sustainable, both because it travelled beyond the show cause notice and because the claims were within time.

Final Conclusion: The impugned appellate order was set aside and the refund claims were restored in full.

Ratio Decidendi: A substantive exemption benefit cannot be denied for breach of a merely procedural condition once the core eligibility requirements are met, and a demand or rejection cannot be sustained on a ground not pleaded in the show cause notice.

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