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TMI Blog2002 (7) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the goods in Domestic Tariff Area (DTA). On the scrutiny of the invoices issued by them for clearance of goods in DTA, it revealed that they had been clearing Cotton Yarn and Polyester/Cotton yarn on payment of duty @ 8% and 15% adv. respectively, as per Notification No. 8/97-C.E., dated 1-3-1997, as amended by Notification No. 11/2000 dated 1-3-2000. This Notification after amendment, exempted finished products, rejects waste and scrap manufactured in 100% EOU wholly from raw material produced and manufactured in India and allowed to be sold in India in accordance with the Import Export Policy from so much of duty of excise leviable thereon under Section 3 of the Central Excise Act as is in excess of an amount equal to the aggregate of duties of excise leviable under Section 3 of the Central Excises Act, 1944 or under any other law for the time being in force on like goods produced or manufactured in India by a unit other than 100% EOU, if sold in India. 3. The goods were manufactured by the appellants in the instant case wholly from indigenous raw material, but paid duty in accordance with the Notification No. 8/97-CE dated 1-3-1997, even after its amendment vide Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Counsel, had never been withdrawn or rescinded and as such any amendment through the Notification No. 11/2000-C.E. dated 1-3-2000 in the Notification No. 8/97-C.E., dated 1-3-1997, did not take away the right of the appellants to claim the benefit under the said Notification No. 55/91-C.E. The learned Counsel in support of his contention has relied upon the Apex Court judgment in the case of U.O.I. v. Modi Rubber Ltd., 1986 (25) E.L.T. 849 (S.C.). The observations of the Apex Court in that case relied upon by the learned Counsel, read as under - It is obvious that when a notification granting exemption from duty of excise is issued by the Central Government in exercise of the power under Rule 8(1) simpliciter, without anything more, it must, by reason of the definition of duty contained in Rule 2 clause (v) which according to the well-recognised canons of construction would be projected in Rule 8(1), be read as granting exemption only in respect of duty of excise payable under the Central Excises and Salt Act, 1944. Undoubtedly, by reason of sub-section (4) of Section 32 of the Finance Act, 1979 and similar provision in the other Finance Acts, Rule 8(1) would become applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 55/91-C.E. by a 100% EOU for the clearances made in the DTA. 8. For appreciating the respective contentions of both the sides, it would be beneficial to refer firstly to the relevant Notifications relied upon by both the sides. The Notification No. 8/97-C.E. is a general Exemption Notification regarding effective rate of duty on certain goods produced in FTZ or EOU which reads as under - Effective rate of duty on certain goods produced in FTZ or EOU. - In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the finished products, rejects and waste or scrap specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and produced or manufactured, in a hundred per cent export-oriented undertaking or a free trade zone wholly from the raw materials produced or manufactured in India, and allowed to be sold in India under and in accordance with the provisions of paragraphs 102 and 114 of the Export and Import Policy 1 April 1992 - 31 March 1997, from so much of the duty of excise leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... central excise duty under the Central Excise Act + Additional Duty of Excise under T TA Act). Notification No. 8/97-C.E., dated 1-3-1997, referred to above, before amendment provided exemption to the finished products, rejects and waste or scrap, produced or manufactured in a 100% Export Oriented Undertaking or a free trade zone wholly from the raw materials produced or manufactured in India and allowed to be sold in India from so much of duty of excise leviable thereon under Section 3 of the Central Excises Act, as is in excess of an amount equal to the duty of excise leviable under the said Section 3 of the Act on like goods produced or manufactured in India other than in a 100% EOU, if sold in India. But after amendment of this Notification as amended by Notification No. 11/2000, referred to above, it is evident that the excise duty payable by a 100% EOU under the Central Excise Act in respect of finished goods manufactured exclusively from indigenous raw material and cleared into the DTA, would be restricted to the aggregate of the duties of excise leviable under the said Section 3 of the Central Excise Act or under any other law for the time being in force, on like goods pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the appellants w.e.f. 1-3-2000. The Circular No. 384/17/98-CX., dated 20-3-1998 allowing benefit of both the Notifications to a 100% EOU was issued before the amendment of Notification No. 8/97. Moreover, even the Board itself by a subsequent Circular No. 554/50/2000-CX., dated 19-10-2000 clarified the position that after the amendment of the Notification No. 8/97, the benefit of Notification No. 55/91-C.E. could not be claimed by the EOU, for the goods sold in the DTA. 11. The question, as to whether the benefit of Notification No. 55/91-C.E. could still be claimed by 100% EOU for the clearances in DTA after the amendment in the Notification No. 8/97-C.E. by the amending Notification No. 11/2000, referred to above, and whether the Board s Circular dated 19-10-2000, referred to above, clarifying the position that such a benefit was not available, was legal or not came up for consideration before the Hon ble P H Court in the case of Vardhman Polytex Ltd. v. U.O.I., 2001 (135) E.L.T. 17 (P H), and the Hon ble High Court was pleased to hold as under - Notification 55/91-C.E., dated 25-7-1991 is directly relatable to the goods manufactured by 100% EOUs, and exported out of ..... 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