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TMI Blog2021 (9) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... TP unit by virtue of aforesaid Notification, there was no duty payable, as the said inputs were removed with the previous permission of the department as reflected in CT-3. The said decision was applied by the Tribunal in the case of M/S. LAKSHMI AUTOMATIC LOOM WORKS LTD. VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, COIMBATORE [ 2021 (9) TMI 35 - CESTAT CHENNAI] . The Hon'ble High Court of Madras in the judgment by which the matter was remanded has referred the said decision in Solectron Centum Electronics Ltd. with approval and also directed the Tribunal to consider the applicability of the said judgment. The issue raised and analyzed in the case of Solectron Centum Electronics Ltd. is identical and squarely applicable to the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also availed MODVAT facility. They removed some inputs as such without payment of duty availing exemption under Notification No.1/95-CE dated 4.1.1995. The department was of the view that as per condition No. 1(b) of Notification No. 1/95, the user industry has to procure the goods directly from the factory of manufacturer or from the warehouse and use the goods for the purposes of export. The assessees have not manufactured the inputs in their factory and therefore not entitled to the exemption as per the notification. Show Cause Notice was issued alleging the above violation and also proposing to demand duty. After due process of law, the original authority held the issue against the assessee and confirmed the demand proposed in the Show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as remanded to the High Court of Karnataka for a fresh consideration, we are of the view that the Tribunal should have a fresh look into the matter taking note of the legal position as laid down in the case of Solectron Centum Electronics Ltd. 5. With this background, we proceed to analyse the issue before us. 6. The learned counsel Shri J. Shankar Raman referred to Notification No. 1/95-CE dated 4.1.1995. The condition at 1(b) of the said Notification reads as under:- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act/ 1944 (1 of 1944), read with subsection (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riented undertaking has been approved by the Board of Approval for hundred per cent export oriented undertaking (hereinafter referred to as the said Board) appointed by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951) and the rules made under that Act; (ii) unit in Electronic Hardware Technology Park (EHTP) Scheme has been approved by the inter-Ministerial Standing Committee (hereinafter referred to as the said Committee) appointed by the notification of the Government of India in the Ministry of Industry (Department of Industrial Development) No. S.O. 117(E), dated the 22nd February, 1993; (iii) unit in Software Technology Parks (STP) Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notices were issued for recovery of duty of such spares / inputs cleared as such to 100% EOUs. On the one hand, the department denies the clearance of inputs as such alleging that these inputs cannot be considered as manufactured goods at the factory of the appellant. On the other hand, they have proceeded to demand duty on such spares on the basis of the sales price of such spares deeming that they have been manufactured by the appellant. 9. Notification 1/95 is a benevolent notification wherein the 100% EOUs are entitled to procure raw materials and packing materials without payment of duty for use in their production and subsequent export. The interpretation adopted by the department to deny the benefit is contrary to the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is only when those inputs as such were removed to the EHTP unit, the Cenvat credit availed was reversed. It is because, if the assessee had purchased those inputs for its EHTP unit by virtue of aforesaid Notification, there was no duty payable, as the said inputs were removed with the previous permission of the department as reflected in CT-3. There was no liability to pay the duty and already Cenvat credit had been taken, it was reversed under protest and therefore, they were entitled to the refund of the said amount. That question is also answered in favour of the assessee and against the Revenue . 15. The said decision was applied by the Tribunal in the case of Lakshmi Automatic Loom Works Ltd. (supra). The Hon'ble High Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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