Substantial compliance with exemption conditions upheld where bank drafts were issued against society cheques for yarn payments.

Payment for yarn made through bank drafts or pay orders did not justify denial of exemption where the drafts were prepared by the bank on cheques drawn by the cooperative societies on their own accounts. The Revenue's objection was limited to the payment mode, and no contrary evidence displaced the finding that the notification condition was met in substance. The Tribunal applied its earlier view that such payment constitutes substantial compliance with the exemption notification. The benefit of the exemption was therefore not to be denied.

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Issues: Whether the benefit of the exemption notifications could be denied on the ground that payment for yarn was received through bank drafts or pay orders, and whether the condition requiring payment by cheques drawn by the cooperative societies on their own bank account was substantially complied with.

Analysis: The Revenue's objection was confined to the mode of payment. The finding recorded by the adjudicating authority was that the draft orders and pay orders were prepared by the bank on the basis of cheques drawn by the societies on their own account, and no contrary evidence was produced to dislodge that finding. The Tribunal also relied on its earlier view that payment through a bank draft prepared against such cheques amounts to substantial fulfilment of the notification conditions.

Conclusion: The condition of the exemption notifications was substantially complied with, and the denial of benefit was not warranted.

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