TMI Blog2019 (5) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... not liable to pay service tax. Demand cannot sustain - appeal allowed - decided in favor of appellant. - Appeal No. ST/593/2012 - Final Order No. 40409/2019 - Dated:- 27-2-2019 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri J. Shankarraman, Advocate for the Appellant Shri Jagan Babu, AC (AR) for the Respondent ORDER Per Bench Brief facts are that the appellants had paid service tax on process done to goods received from 100% EOU from 1.3.2009 but failed to pay service tax for the period from 15.6.2005 to 28.2.2009. Show Cause Notice was issued proposing to demand service tax along with intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has to pay the service tax for the job work activity. He argued that the goods manufactured by 100% EOU are exported and they are not unconditionally exempted. It is settled law that export of goods cannot be equated with clearance of goods exempted from the whole of duty or goods chargeable to nil rate of duty. The Tribunal in the case of Alpha Drugs India Ltd. Vs. Commissioner of Central Excise 2000 (118) ELT 783 held that export of goods under bond without payment of duty are neither goods exempted from whole of duty nor goods chargeable to nil rate of duty. This was upheld by the Hon ble High Court of Punjab and Haryana as reported in 2002 (140) ELT 43 (P H). The above view was followed in the case of Interplex Electronics Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the submission that the Notification when read with the appropriate duty of excise would mean that only when the goods manufactured by the principal manufacturer attract nil rate of duty as per tariff or unconditional full exemption, the benefit of Notification No. 8/2005 is denied. In this case, the 100% EOU viz., M/s. Tyco Electronics to whom the appellants have supplied the goods on job work basis is eligible for exemption Notification No. 24/2003-C.E., dated 31-3-2003. It is the stand of the department that this notification exempts 100% EOU from payment of duty and therefore the appellant is not eligible for the benefit of Notification No. 8/2005-S.T. We find that Notification No. 24/2003-C.E., dated 31-3-2003 has a proviso which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise would mean that only when the goods manufactured by the principle manufacturer attract nil rate of duty as per tariff or unconditional full exemption, exemption under Notification No. 8/2005 is to be denied. EOU are exporting the goods under bond and as such it was held that the appellant assessee who is doing process on behalf of EOU are eligible for the said exemption. Similar ratio on identical terms for exemption has been examined by the Hon ble P H High Court in Alpha Drugs (I) Ltd. (supra) and Hon ble Madras High Court (supra). 7. In view of the above, we hold that the demand cannot sustain. The impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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