Substantive exemption benefit prevails over impossible procedural compliance, making denial of customs duty refund unsustainable.

Exemption from additional customs duty could not be denied merely because the relevant Central Excise notification was conditional and Chapter X procedure could not be complied with literally after import. The controlling principle applied was that procedural impossibility should not defeat the substantive exemption benefit for imported goods, following the Supreme Court's view on preservation of the underlying relief. On that basis, denial of refund was unsustainable and the assessee was entitled to the exemption.

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Issues: Whether refund of additional customs duty could be denied on the ground that the exemption under the relevant central excise notification was conditional and the Chapter X procedure could not be followed after import.

Analysis: The controlling principle applied was that exemption cannot be refused merely because the procedural requirements under Chapter X of the Central Excise Rules were incapable of literal compliance by an importer. The reasoning followed the Supreme Court's view that the substantive benefit of the exemption could not be defeated on that ground in respect of imported goods.

Conclusion: The denial of refund was unsustainable, and the assessee was entitled to the benefit of the exemption.

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