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TMI Blog2009 (2) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 passed by Commissioner (Appeals), Jaipur. Both the Appellants are 100% EOUs engaged in the manufacture of Terry Towels for export. As per the EXIM Policy, the 100% EOUs are allowed to sell a portion of their production into Domestic Tariff Area (DTA) on payment of appropriate duty as per the provisions of the proviso to Section 3(1) of Central Excise Act read with exemption notification, if any applicable. As per the proviso to Section 3(1), the duty payable on the goods manufactured in a 100% EOU and cleared into DTA is an amount of equal to aggregate duties of Customs which would be leviable under Customs Act, 1962 or any other law for the time being in force on the like goods produced or manufactured outside India, if imported into In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all goods of Chapter 63 except jute blankets and sack and bags used for packing of the goods", subject to condition that such goods have been made from woven textile fabrics, whether or not processed, on which Central Excise Duty under the First Schedule to the Central Excise Tariff Act and Additional Excise Duty chargeable under Additional Duties of Excise (Goods of Special Importance) Act [hereinafter referred to AED(GSI)], read with any exemption notification for the time being in force or Additional Duty of Customs chargeable under Section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid. According to the Appellants, the DTA clearances of the Terry Towels made by them satisfied the conditions of the Notification No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deemed to have been produced out of duty paid terry towel cloth. (2) The Central Board of Excise and Customs (CBEC) vide circular No.125/36/95-CX dt. 15-5-95 in respect of exemption from excise duty on goods manufactured from duty paid goods, has clarified that there are a number of notifications which exempt specified goods provided such goods have been made from other goods on which appropriate duty of excise had been paid - for example Notification No. 35/95-C.E. and 28/95-C.E. and that even if the inputs are exempt from excise duty, the exemption on the finished goods cannot be denied on the ground that the inputs were exempt from the whole of duty of Excise. As per Supreme Court's judgment in the case of CCE v. Dhiren Chemical indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction of the finished goods for export and that subsequently even the Board's circular No.125/36/95-CX., dt. 15-5-95 had been modified by Circular No. 667/58/02, dt. 26-9-02 and that as per the revised circular, the Appellants are not eligible for concessional rate of duty under Notification No.15/02-C.E. 4. We have carefully considered the submissions from both the sides and perused the records. The Appellants manufactured terry towels falling under Chapter 63 of Central Excise Tariff from yarn acquired free of duty against CT-3 certificate under Notification No.15/02-C.E. The condition for exemption in respect of the goods of Chapter 63 mentioned against S. No.17 of the table annexed to the Notification No.15/02-C.E. is that the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady been paid" was considered by a Constitution Bench of the Hon'ble Supreme Court in the case of CCE, Vadodara v. Dhiren Chemical Industries - 2002 (139) E.L.T. 3 (S.C.) = 2001 (47) RLT 881 (SC). The'Hon Supreme Court have held that the word "appropriate" in the context of such exemption notifications means the correct or specified rate of excise duty, and that where an exemption is extended subject to the condition that the "appropriate duty has been paid" on the raw material, then such exemption shall not be available when the raw material is not liable to excise duty or such duty is nil. In the light of the above, the clarification given by the Board that nil duty paid goods or fully, exempted goods should be deemed to be goods on whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Textile Articles) Act, 1978 [AED (TTA)], even though notification No. 55/91-C.E., dt. 25-7-91 exempts all excisable goods produced or manufactured in a 100% EOU from whole of AED (TTA). Hon'ble Supreme Court held that the amendment to Notification No. 8/97-C.E. by notification No.11/2000-C.E. w.e.f. 1-3-2000 does not dilute the notification No. 55/91-C.E. The issue involved in the present case is totally different. The issue involved in the case of Lucky Star International v. UOI (supra) was as to whether for the purpose of exemption under Notification No. 5/98- C.E., 5/99-CE. and 6/2000-C.E., the condition of goods having been processed in India would be satisfied if the processing is done in a unit in Kandla Free Trade Zone and Hon'ble G ..... X X X X Extracts X X X X X X X X Extracts X X X X
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