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2011 (1) TMI 19 - HC - Central ExciseEOU – returned goods – second supply after return of defective goods – exemption – Held that: - In terms of the notification No. 22/2003 goods cleared to 100% EOU are exempted from payment of Central Excise Duty. Obviously, the assessee committed an error in paying the excise duty. When the said goods were returned because of certain defects, in law they were entitled to claim Cenvat credit which they did. Later, after rectifying the defects in pursuance of a fresh purchase order, they supplied the very same goods to their customer, a 100% EOU. They were under no obligation to pay any duty as payment of duty was exempted vide notification No. 22/2003. On the date of second supply they were also in possession of CT3 certificates. When these facts are not in dispute, though there is no liability on the part of the assessee to pay excise duty, the proceedings initiated against the assessee claiming excise duty was without jurisdiction. The order demanding duty as well as penalty is also one without jurisdiction
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