Mandatory procedure for proforma credit under central excise can bar entitlement where prescribed records and prior permission are absent.

Compliance with the prescribed procedure for availing proforma credit under Rule 56A of the Central Excise Rules, 1944 was treated as integral to the concession where the assessees had not maintained RG 23 records, given D-3 intimation or obtained prior permission. The analysis distinguished a curable procedural lapse from a substantive condition and concluded that, on the facts, the non-compliance went to the root of entitlement rather than amounting to a mere technical defect. The reference application was therefore rejected because no question of law arose from the Tribunal's finding that the statutory conditions for claiming the credit were not satisfied.

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Issues: Whether compliance with the procedure for availing proforma credit under Rule 56A of the Central Excise Rules, 1944 was mandatory so as to deny the credit when prescribed records and prior permission were not maintained.

Analysis: The dispute turned on whether the requirements regarding maintenance of RG 23 records, D-3 intimation and prior permission were merely procedural or formed part of the substantive conditions for availing the concession. On the facts found, the assessees had not maintained the prescribed records and had not complied with the statutory procedure. The distinction between a curable procedural lapse and a substantive condition was applied by reference to the nature of the exemption scheme, which made compliance with the prescribed procedure essential in the facts of the case. The judgment treated the non-compliance as going to the root of entitlement and not as a mere technical irregularity.

Conclusion: The reference application was rejected because no question of law arose from the Tribunal's finding that the conditions for availing proforma credit were not complied with and the benefit could not be claimed.

Ratio Decidendi: Where availing a concessional excise benefit is made conditional upon compliance with prescribed procedural requirements that are integral to the scheme, non-compliance may disentitle the claimant from the concession and is not necessarily a condonable technical lapse.

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