Exemption notification compliance upheld where payment through drafts or pay orders came from the society's bank account.

Compliance with an exemption notification was satisfied where yarn was paid for through demand drafts or pay orders procured against cheques drawn on the registered co-operative society's bank account. The Tribunal treated this as substantial compliance with the requirement that payment be made by cheque from the society's account, and held that the form of remittance did not defeat the exemption when the underlying source of funds was the society's account. Alleged subsequent transfer or sale of the yarn was not a condition in the notification and could not be imported to deny relief. The exemption was upheld and the demand and penalties were unsustainable.

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Issues: Whether the appellants were entitled to the benefit of Notification No. 53/91 dated 25-7-1991 when payment for yarn was made through Demand Drafts or Pay Orders procured against cheques drawn on the account of the registered co-operative society, and whether alleged subsequent transfer or sale of yarn affected eligibility.

Analysis: The decisive question was compliance with the notification condition requiring payment by cheque drawn on the society's account. The Tribunal treated payment through Demand Drafts or Pay Orders as substantial compliance where the instruments were obtained against cheques issued from the society's bank account. It further held that the alleged post-procurement transfer or sale of yarn was not a condition specified in the notification and could not by itself defeat the exemption. The facts were found to be identical to earlier decisions of the Tribunal applying the same notification.

Conclusion: The appellants had complied with the conditions of the notification and were rightly entitled to the exemption benefit; the demand and penalties were unsustainable.

Ratio Decidendi: Where the substantive requirement of payment from the registered society's bank account is met, payment through Demand Drafts or Pay Orders obtained against cheques drawn on that account amounts to sufficient compliance with the exemption notification, and unexpressed post-clearance restrictions cannot be imported into it.

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