Substantial compliance in exemption claims defeats denial for procedural defects where project use and end-use compliance are established.

Exemption under Notification No. 6/2006-CE and Notification No. 12/2012-CE for goods supplied to a recognised mega power project could not be denied merely because the prescribed undertaking or supporting documents were not furnished in the exact form or by the precise signatory specified. The substantive conditions were satisfied: the project was certified as a mega power project, the goods were intended for and used in that project, and there was no allegation of diversion or misuse. The undertaking requirement was treated as procedural, aimed at end-use compliance and preventing misuse. On that basis, the denial of exemption was unsustainable and the demands were set aside.

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Issues: Whether exemption under Notification No. 6/2006-CE dated 01.03.2006 and Notification No. 12/2012-CE dated 17.03.2012 could be denied merely because the prescribed undertaking and supporting documents were not furnished in the exact form or by the precise signatory contemplated in the notifications, despite the substantive conditions for the benefit being satisfied.

Analysis: The exemption claims related to supply of goods for a recognised mega power project. The record showed that the project was certified as a mega power project and that the goods were intended for and used in that project. The object of the undertaking requirement was to prevent misuse of the exemption and secure end-use compliance. In the absence of any allegation of diversion or misuse, the omission or deviation in the manner of furnishing the undertaking was treated as a procedural defect. The substantive eligibility conditions having been met, the benefit could not be denied solely on technical non-compliance.

Conclusion: The denial of exemption was unsustainable. The assessee was entitled to the benefit of both notifications, and the issue was decided in favour of the assessee.

Final Conclusion: The demand confirmations were set aside and the appeals succeeded because the notifications were held to be available on the basis of substantial compliance with their essential requirements.

Ratio Decidendi: Where the substantive conditions of an exemption notification are satisfied and there is no misuse or diversion of goods, mere procedural non-compliance in furnishing required documents or undertakings cannot defeat the exemption.

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