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2010 (3) TMI 1030 - KARNATAKA HIGH COURTWhether the Karnataka Appellate Tribunal was right in law in dismissing the appeals holding that the exemption granted to a 100 per cent EOU vide Notification No. FD 32 CSL 96 (V) dated November 15, 1996 is applicable only to the extent of goods purchased and used in the manufacture of goods which are physically exported out of the country and not applicable to extent of goods sold in the DTA? Held that:- The Joint Commissioner of Commercial Taxes (Appeals) as well as the Tribunal have committed a serious error in reading the clause in isolation with clause (iii) on account of bifurcation of clauses (i) to (iii) separately, and an error has been committed by the authorities below in denying the relief to the assessee. According to us, if relaxation has been granted by the Government, the assessee is entitled to sell its products in the domestic tariff area. If the assessee had sold in excess of the permission granted by the Government of India, in the domestic tariff area, in such circumstances, the respondent would have been justified in denying the claim of the assessee. But, it is not the case of the Revenue that in excess of the relaxation permitted by the Government of India to the assessee to sell its products in the domestic tariff area, the assessee has sold the goods manufactured by it. Since there is no violation, we are of the view that the orders passed by the Karnataka Appellate Tribunal as well as by the Joint Commissioner of Commercial Taxes and so also by the Deputy Commissioner of Commercial Taxes are required to be set aside, answering the question of law in favour of the assessee and against the Revenue. Accordingly, this revision petition is allowed.
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