Election of clearance basis bars later reclassification for concessional duty under the EXIM Policy exemption scheme.

A 100% Export Oriented Unit that cleared goods to the Domestic Tariff Area under Paragraph 9.9(e) of the EXIM Policy could not later reclassify those clearances under Paragraph 9.9(b) to claim Notification No. 8/97. The notification extended concessional duty only to DTA clearances covered by specified clauses of Paragraph 9.9, and Paragraph 9.9(e) was outside that scope. Having elected to clear the goods under Paragraph 9.9(e) and issued invoices on that basis, the unit was bound by that choice and could not change the basis through a revised return. The exemption claim failed on merits, though the penalty was set aside.

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Issues: Whether goods cleared by a 100% Export Oriented Unit to the Domestic Tariff Area under Paragraph 9.9(e) of the EXIM Policy could later be reclassified under Paragraph 9.9(b) to claim the benefit of Notification No. 8/97, and whether the appellant could change its chosen basis of clearance by filing a revised return.

Analysis: The appellant had permission to clear the goods under both Paragraph 9.9(b) and Paragraph 9.9(e) of the EXIM Policy, but in May 2000 it actually cleared the goods under Paragraph 9.9(e) and issued modvatable invoices on that basis. Notification No. 8/97 granted concessional duty only to DTA clearances falling within the specified clauses of Paragraph 9.9 of the EXIM Policy, and Paragraph 9.9(e) was not one of the covered clauses. Once the appellant elected to clear the goods under Paragraph 9.9(e), it was bound by that election and could not later switch to another clause to obtain a different fiscal benefit by filing a revised return.

Conclusion: The appellant was not entitled to the benefit of Notification No. 8/97, and the appeal failed on merits. The penalty, however, was set aside.

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