Exemption notification conditions and register maintenance were treated as non-mandatory; stay granted on prima facie case.

Explanation 4 to Notification No. 115/86 was treated as a method for working out exemption, not as a pre-condition to claim it, and a monthly basis for the refund claim was accepted at the prima facie stage. The assessee therefore had a prima facie case despite the alleged non-compliance. The notification also did not make maintenance of registers a mandatory condition; records maintained under other regulatory requirements were treated as sufficient to support the calculation at the interim stage. On both issues, the assessee was found to have a strong prima facie case, and recovery of the balance duty was stayed by waiving further pre-deposit.

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Issues: (i) Whether compliance with Explanation 4 to Notification No. 115/86 was a pre-condition for availing the exemption. (ii) Whether maintenance of registers was mandatory for calculating the percentage of specified oils used under the notification.

Issue (i): Whether compliance with Explanation 4 to Notification No. 115/86 was a pre-condition for availing the exemption.

Analysis: Explanation 4 only prescribed two alternative bases for working out the exemption, namely individual charge of oil or monthly calculation. The benefit of an exemption notification can be claimed at a later stage, and the refund claim had been worked out on a monthly basis. On a prima facie view, non-compliance with Explanation 4 did not bar the claim to exemption itself.

Conclusion: Compliance with Explanation 4 was not a pre-condition to avail the exemption; the assessee had a prima facie case.

Issue (ii): Whether maintenance of registers was mandatory for calculating the percentage of specified oils used under the notification.

Analysis: The notification did not itself prescribe maintenance of registers as a mandatory condition. The assessee relied on records otherwise required to be maintained under other regulatory regimes, and those records were considered sufficient at the interim stage to support the calculation of the claim.

Conclusion: Maintenance of registers was not mandatory under the notification; the assessee had a prima facie case on this issue as well.

Final Conclusion: The assessee was found to have a strong prima facie case, and recovery of the balance duty was stayed by waiving the further pre-deposit requirement.

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