EOU exemption for damaged goods returned to factory supported waiver of pre-deposit and stay of recovery

A 100% export-oriented unit was considered eligible for exemption under Notification No. 24/2003-CE for excisable goods other than those cleared to the domestic tariff area. Damaged granite tiles that had been cleared and later returned to the factory after transit damage fell within the notification's apparent scope on the stated facts. On that basis, a strong prima facie case was made for interim relief, supporting waiver of pre-deposit and stay of recovery of the duty and penalty demanded.

---

---

Issues: Whether the appellants, a 100% export-oriented unit, were entitled to waiver of pre-deposit and stay of recovery in respect of duty and penalty demanded on damaged granite tiles returned to the factory, in the light of Notification No. 24/2003-CE dated 31-3-03.

Analysis: The goods had been cleared in the 2003-04 period but were found available in the factory after being damaged in transit and taken back. Notification No. 24/2003-CE granted exemption from duty to a 100% EOU in respect of excisable goods other than those cleared to the domestic tariff area. On the facts presented, the benefit of the notification appeared available, and a strong prima facie case was made out for interim relief.

Conclusion: The appellants were entitled to waiver of pre-deposit and stay of recovery of the duty and penalty amounts.

---