Procedural compliance for duty credit was satisfied in substance, so denial before formal permission was unjustified.

Money credit under Notification No. 192/87 could not be denied merely because formal Commissioner permission had not yet been granted, where the prescribed procedure was later followed and the identity of the input vegetable oil was established in substance. The procedural condition under Rule 57K was aimed at securing identification of the oil, and the assessee had applied for permission, maintained documentary control, produced gate passes, and did not use the credit before approval. As the department did not dispute that the specified oil was actually used for the notified purpose, denial of credit for the intervening period was not justified.

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Issues: Whether money credit under Notification No. 192/87 could be denied for the period after the Trade Notice but before formal permission of the Commissioner, when the prescribed procedure was followed in substance and the identity of the input oil was established.

Analysis: The notification under Rule 57K made the credit conditional where hydrogenation or hydrolysis was carried out outside the soap factory, but the condition was directed only to the procedure specified by the Commissioner for establishing the identity of the vegetable oils. The Trade Notice prescribing that procedure came later than the notification, and the record showed that the assessee applied for permission, maintained documentary control, produced gate passes, and did not utilise the credit before permission was granted. The object of the procedural requirement was only to ensure identification of the input, and that object had been complied with in substance. Since the department did not dispute that the specified oil had actually been used for the notified purpose, denial of the credit for the intervening period was not justified.

Conclusion: Money credit could not be denied for the period from 15-9-1987 to 27-12-1987, and the assessee succeeded.

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