VIRLON TEXTILE MILLS Vs. COMMISSIONER OF CENTRAL EXCISE,

JUDGEMENT

(1.) THE appellant is a 100% export oriented unit (EOU) engaged in the manufacture of texturised polyester yarn and dyed polyester yarn. The question for consideration in this appeal is the rate of duty that will apply to that part of the production of these goods that it cleared to the domestic tariff area i.e., the domestic market.

(2.) IN the order impugned in the appeal the Commissioner has held that the duty that should be paid on such clearance would, in accordance with the proviso under Sub -section (1) of Section 3 of the Central Excise Act, 1944, be equal to the customs duty which will be leviable under Section 12 of the Customs Act, 1962 on like goods produced by a manufacturer outside India. He has held that the duty that should be paid was to be calculated, and also imposed a penalty on the appellant under Rule 173Q for various contravention. The Commissioner had rejected the contention taken before him that the benefit of notification 53/97 would be available to these goods.

(3.) IN our opinion he is right. The notification exempts from customs duty goods specified in the table to it imported into India or procured from a bonded warehouse for manufacture of articles for export out of India or for being used in connection with the production or packaging of such goods for export, in a 100% export oriented approved by the board of approval of the Government of India. Para 7 of this notification, which the counsel for the appellant relies upon, only provides that the exemption contained in notification will apply to goods which are used for the manufacture of articles which are allowed to be sold in India in accordance with the Export Import Policy on payment of duty under Section 3 of the Central Excise Act, 1944. The paragraph does not have slightest application in determining the rate of duty payable on such goods. All it says is that the exemption will be available to the goods that the notification specifies, even if they are used in the manufacture of goods sold in India in accordance will the Policy.