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2014 (9) TMI 773 - AT - Central Excise100% EOU - clearance of goods to DTA - whether the respondents are eligible for the benefit of Notification No.8/97 - Held that - Notification No. 8/97-CE excludes the exemption, in case the finished goods are wholly exempt or chargeable to NIL rate of duty, if manufactured and cleared by a unit other than a 100% EOU. In the present case, the goods manufactured by the respondent is wholly and unconditionally exempt by Notification No. 5/99-CE dated 28.2.1999 (1st SCN) and 6/2000 dated 1.3.2000 (2nd SCN). It is seen that Condition (a) of Notification No.13/98, extended the benefit to such finished goods, if manufactured and cleared by a 100% EOU to DTA, if the finished goods is wholly exempt from the duties or chargeable to NIL rate of duty. So, the respondents are liable to pay duty on the items in question in terms of Notification No. 13/98. It is noticed that the demand raised in respect of the period of dispute from December 1999 and January 2000 to November 2000 which are covered by both the Notifications. So, we find that the demand of duty as confirmed by the adjudicating authority is justified. However, penalty is set aside - Decided partly in favour of Revenue.
Issues:
1. Interpretation of Notification No. 8/97-CE and eligibility for exemption. 2. Application of Notification No. 13/98-CE and its impact on the case. Issue 1: The main issue in this case revolves around the eligibility of the respondents for the benefit of Notification No. 8/97-CE. The case involves a 100% EOU engaged in the manufacture of cotton yarn, claiming exemption under this notification. The Revenue argues that the proviso to Notification No. 8/97 excludes the benefit for the respondents. The Tribunal analyzes the notification's provisions, emphasizing the conditions for exemption based on the source of raw materials and the destination of the finished goods. The Tribunal notes that the goods in question were wholly exempt by other notifications, leading to the conclusion that the respondents are liable to pay duty under Notification No. 13/98-CE. Issue 2: The adjudicating authority extended the benefit of Notification No. 13/98-CE in this case. This notification provides exemptions for products manufactured in a 100% EOU to DTA, subject to certain conditions. The Tribunal carefully examines the relevant portions of Notification No. 13/98-CE, highlighting the criteria for eligibility and the implications for duty payment. Considering the period under dispute and the coverage of both notifications, the Tribunal upholds the demand of duty along with interest, setting aside the penalty due to the case's nature as a matter of statutory interpretation. In conclusion, the Tribunal sets aside the Commissioner (Appeals) order and upholds the adjudication orders regarding the demand of duty with interest. The penalty is waived due to the statutory interpretation involved. The benefit of cum-duty price is extended in calculating the duty demand. Both appeals filed by the Revenue are disposed of accordingly.
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