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TMI Blog2002 (12) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturers of cotton yarn falling under heading No. 52.05 and gray fabrics falling under heading No. 60.01 of the Schedule to the Central Excise Tariff Act, 1985. They are a 100% EOU unit. 3. The appellants had cleared cotton yarn to DTA in accordance with the provisions of the Exim Policy without payment of AED (T and TA) to the tune of Rs. 1,13,979/- during the period from 26-2-2000 to 18-10-2000. Accordingly, a notice was issued by the Supdt. demanding this duty to that extent under Section 11A along with the proposal for imposition of penalty under Section 11AC and interest under Section 11AB. Subsequently, a corrigendum to the notice was issued proposing demand of interest under Section 11AA and penalty under Rules 173Q and 210 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5,000/- under Rule 210. 5. In the grounds of appeal, the appellants stated that Notfn. 55/91-C.E., dated 25-7-91 unconditionally exempted excisable goods manufactured in a 100% EOU from additional excise duty under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. Therefore, there was no question of payment of any such duty. The same submissions were reiterated by Shri P. Sreedharan, Consultant, who appeared for the hearing before me. 6. I have gone through the grounds of appeal, submissions made at the time of hearing and all other evidence on record. Section 3 of the Central Excise Act, 1944 creates a liability to excise duty when goods are produced or manufactured in India. The production or manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Excise (Textiles and Textile Articles) Act, 1978 on production or manufacture of excisable goods in a 100% EQU has been totally extinguished by virtue of this Notfn. No. 55/91-CE, dated 25-7-91. Therefore, the measure of the tax under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, for goods manufactured in a 100% EOU is zero. When additional excise duty liability itself is reduced zero on goods manufactured or produced in a 100% EOU, there is no question of determining the liability by referring to the provisions contained in the proviso to sub-section (1) of section 3 ibid and the elements that constitute the duties of Customs. The interpretation placed by lower authority by relying on the Board's Circular No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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