2006 (1) TMI 392 - AT - Central Excise

Summary

Issues:
1. Whether clearances from a 100% E.O.U. to domestic areas can be treated as exports for duty exemption.
2. Applicability of excise exemption Notification No. 125/84-C.E. to goods cleared in the domestic tariff area.
3. Discrepancy in decisions of different benches of the Tribunal regarding similar cases.
4. Need for reference to a Larger Bench for resolving the issue.

Analysis:
1. The appellant, a 100% E.O.U., claimed that clearances to domestic areas should be treated as exports for duty exemption. However, the Tribunal held that such clearances do not qualify as exports under relevant statutes, which define exports as physically taking goods out of India. Thus, the clearances to domestic areas do not meet the export criteria, leading to the denial of duty exemption.

2. Regarding the applicability of excise exemption Notification No. 125/84-C.E., the Tribunal noted that the notification exempts goods manufactured in a 100% E.O.U. unless they are allowed to be sold in India. As the appellant's clearances were made in the domestic tariff area with permission from the Development Commissioner, the exemption under the proviso of the notification was denied.

3. The Tribunal acknowledged conflicting decisions by other benches on similar issues. While some benches ruled in favor of treating domestic clearances as exports, the present bench's decision contradicted those rulings. To address this inconsistency, the Tribunal deemed it necessary to refer the matter to a Larger Bench for a comprehensive resolution.

4. In light of the conflicting decisions and the need for clarity, the Tribunal decided to refer the issue to a Larger Bench for further deliberation. The Registry was instructed to present the matter before the Hon'ble President for the constitution of a Larger Bench to resolve the discrepancies in the interpretation of the law.

Therefore, the judgment highlighted the distinction between domestic clearances and exports, the limitations of excise exemption notifications, discrepancies in Tribunal decisions, and the decision to refer the matter to a Larger Bench for a more definitive resolution.