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2016 (1) TMI 92 - AT - Customs100% EOU - Appellant received sandal wood from M/s Karnataka Soaps and Detergents Ltd. (KSDL) for extraction of sandal wood oil on job work basis - due permission for doing the job work was not availed by the appellant from the Development Commissioner - Held that:- No doubt the assessee working under the customs and excise arena is required to follow the procedure laid down under the law and to fulfill the conditions for availment of benefit of any procedure of law. However, it is also well settled that some of the conditions required to be followed by an assessee are procedural conditions. Whereas non-fulfillment of substantive conditions would definitely result in denial of consequent benefit, non-fulfillment of procedural conditions may not. It is the Revenues case that if the permission of the Development Commissioner was sought, it would have been granted by him in the ordinary course. The appellant was entitled to do job work for the principal manufacturer located in DTA. In such a scenario, we are of the view that non-taking of the permission, though a contravention, may not result in confirmation of demand of duty. Accordingly, we set aside the confirmation of duty along with interest and imposition of penalty under Section 11AC of the Central Excise Act - as there is admittedly a violation of the procedures required to be followed by the appellant, we uphold the imposition of penalty under Rule 26 of the Central Excise Rules 2002 but reduce the same to ₹ 2000 - Appeal disposed of.
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