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of <h1>Entitlement to exemption by self-credit under refund mechanism sustained despite failure to give pre-clearance intimation</h1> Entitlement to exemption by self-credit under the refund mechanism is addressed where failure to give pre-clearance intimation under the notification is ... Entitlement to exemption by self-credit under refund mechanism - failure to comply with the pre-clearance intimation requirement in para 2D(c) of Notification No.20/2007-CE (i.e., filing option for self-credit prior to the first clearance - Procedural condition v. substantive condition - liberal construction of exemption notifications - condonable procedural lapse - Notification No.20/2007-CE - Notification No.01/2010-CE, condition 5(d) - HELD THAT:- As in similar set of facts in the case of Saraswati Agro Chemicals India Ltd. [2018 (3) TMI 263 - CESTAT CHANDIGARH] this Tribunal has granted the benefit of exemption notification condition 2(D) of the Notification. Following the same we hold that the condition 2(d) of Notification in question is only a procedural lapse and for that substantial benefit cannot be denied to the Respondent as held by this Tribunal in the case of Lux Industries Limited v. commissioner of Central Excise [2024 (9) TMI 238 - CESTAT KOLKATA] In view of this we do not find any merit in the appeal filed by the Revenue. Issues: Whether failure to comply with the pre-clearance intimation requirement in para 2D(c) of Notification No.20/2007-CE (i.e., filing option for self-credit prior to the first clearance) is a procedural lapse or a substantive bar to claiming the exemption under the Notification, and whether the benefit of exemption can be denied on that ground.Analysis: The issue was examined in earlier Tribunal and judicial decisions addressing analogous notification conditions (including Condition 5(d) of Notification No.01/2010-CE and paras 2C/2D of earlier Notifications). Those authorities distinguish substantive eligibility criteria from procedural filing requirements and hold that delayed compliance with procedural filing obligationswhere substantive eligibility is otherwise satisfied and the duty payment or credit position is demonstrableconstitutes a procedural lapse that does not defeat the substantive exemption. The Tribunal applied these precedents and the principle that once applicability of an exemption is established, procedural technicalities that do not affect substantive entitlement are condonable; the mechanism of self-credit (suo moto refund) and subsequent verification by the proper officer was considered in context.Conclusion: The failure to give the pre-clearance intimation required by para 2D(c) is a procedural lapse and does not disentitle the respondent from the exemption; the appeal filed by Revenue is dismissed and the cross-objection is allowed accordingly.
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