Exemption for DTA clearances by a 100% EOU was upheld where entitlement adjustment was supported and unchallenged.

Clandestine clearances of yarn by a 100% Export Oriented Unit into the Domestic Tariff Area were treated as eligible for the exemption under Notification No. 8/97-C.E., read with Notification No. 2/95-C.E., because the clearances were adjusted against the unit's Domestic Tariff Area entitlement and that factual position was supported by the RT-13 return and not controverted by the Revenue. Following its earlier decision on similar facts, the Tribunal accepted that the exemption scheme applied and found no basis to deny the benefit.

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Issues: Whether the benefit of Notification No. 8/97-C.E. dated 01.03.1997, and the connected exemption under Notification No. 2/95-C.E. dated 04.01.1995, was available to yarn cleared clandestinely by a 100% Export Oriented Unit into the Domestic Tariff Area.

Analysis: The Respondent's clearances were found to have been adjusted against its Domestic Tariff Area entitlement, as supported by the RT-13 return, and that finding was not controverted by the Revenue. The Tribunal followed its earlier decision in similar facts, where benefit under the exemption scheme was extended after taking Notification No. 2/95 into account. In view of the accepted entitlement position and the reliance on the earlier Tribunal decision, there was no basis to deny the exemption.

Conclusion: The exemption benefit was held to be available, and the Revenue's challenge failed.

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