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2009 (8) TMI 519 - AT - CustomsEOU- Notification No. 53/97-Cus., dated 3-6-97- Notification No. 1/95-C.E., dated 4-1-95-. The appellants are an EOU, engaged in the manufacture and export of P or P medicaments. They had procured through import and from the local market various goods for use in the EOU. Such goods imported were cleared availing exemption under Notification No. 53/97-Cus., dated 3-6-97. Indigenous goods were procured availing exemption under Notification No. 1/95-C.E., dated 4-1-95. These notifications extended exemption from duties of customs/excise, as the case may be, payable in respect of goods procured by an EOU in connection with manufacture and packaging of articles for export out of India. Goods involved were door closures, door fittings, air-conditioners, ball bearings, radio modem, epoxy primer etc. A show cause notice was issued proposing to recover the exemption availed by DRL. Adjudicating the proposals, the original authority found that the goods involved were capital goods used in connection with manufacture or packaging or export goods by the EOU and dropped the proposals. Vide the impugned order, the Commissioner (Appeals) vacated the order of the original authority and confirmed the demand of Rs.9,65,201/- found to be wrongly availed exemption. Under a corrigendum, the lower appellate authority also demanded appropriate interest payable on the goods. Held that- we find that the goods procured are allowed the benefits on the appellants undertaking that they would be put to intended use in terms of the respective notification. In terms of the bond, inadmissible exemption availed by the assessee can be recovered by the authorities without being restricted by the limitation prescribed in the Customs Act or the Central Excise Act. The original authority had found that the fact of use in the factory was adequate for the impugned goods to be eligible for the exemption since the EOU earned foreign exchange for the country. We find that the Apex Court did not approve this reasoning in the CCE Allahabad v. Ginni Filaments reported in 2005 (181) E.L.T. 145 S.C.). In the circumstances we remand the matter to the original authority to examine the entitlement of the goods in terms of the Notifications No. 53/97-Cus., dated 3-6-97 and 1/95-C.E., dated 4-1-95 keeping our observations in mind. Needless to say that the appellants shall be heard before the matter is decided afresh. The appeal is thus allowed by way of remand.
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