2000 (3) TMI 162 - SUPREME COURT

Whether duty is to be leviable in terms of the proviso to Section 3(1) of the Central Excise Act, 1944?

Held that:- Chapter VA of the Central Excise Rules contains provisions for removal from a Free Trade Zone or from a 100% EOU of excisable goods for home consumption. This Chapter was made applicable to units under the EOU Scheme by a Notification No. 130/84-C.E., dated May 26, 1984. This Chapter contains Rules 100A to 100H. Rule 100A provides that the provisions of this Chapter shall apply to a person permitted under any law for the time being in force to produce or manufacture excisable goods in a 100% Export Oriented Undertaking and who has been allowed by the proper officer to remove such excisable goods for being sold in India on payment of duty of excise leviable thereon. It will be thus seen that this Chapter VA would not be applicable where EOU is outside the EOU Scheme after the unit is debonded. Under Rule 100H Rule 57A and other Rules mentioned therein shall not apply to excisable goods produced or manufactured by 100% Export Oriented Undertaking. Rule 57A relates to allowing credit of any duty of excise or the additional duty under Section 3 of the Customs Tariff Act, 1975 as may be specified by the Central Government in the notification, paid on the goods used in or in relation to the manufacture of the final products and for utilizing the credit so allowed towards payment of duty of excise leviable on the final products.

Thus considering the whole aspect of the matter the Tribunal was not right in holding that duty is to be leviable in terms of the proviso to Section 3(1) of the Central Excise Act, 1944. We, therefore, set aside the impugned judgment of the Tribunal and restore that of the Collector of Central Excise, dated October 11, 1994. The appeal is accordingly allowed.