DTA clearance exemption for 100% EOU upheld where sales in India stayed within permitted limits and notification conditions were met.

DTA clearances by a 100% EOU remained eligible for Notification No. 2/95-C.E. where the goods were sold within the permitted DTA limit and fell within the expression "allowed to be sold in India." The Tribunal followed the Supreme Court view that such sales do not lose exemption merely because they are also reckoned for export obligation under Para 9.10(b) of the EXIM Policy 1997-2002. No additional restriction could be read into the notification to deny the benefit, though the assessee still had to satisfy the notification's mandatory conditions.

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Issues: Whether the assessee's DTA clearances by a 100% export oriented unit were eligible for the benefit of Notification No. 2/95-C.E. under Para 9.9(b) of the EXIM Policy 1997-2002, notwithstanding the Revenue's reliance on Para 9.10(b) of the same Policy.

Analysis: The clearances were made within the permitted DTA limit for a 100% EOU. The Tribunal followed the Supreme Court's ruling that sales in India against foreign exchange, when they fall within the expression "allowed to be sold in India," do not lose the benefit of Notification No. 2/95-C.E. merely because they are also reckoned for export obligation under Para 9.10(b). The decision emphasized that no additional restriction could be read into the notification to deny exemption for such clearances, though the assessee must still satisfy the mandatory conditions attached to the notification.

Conclusion: The assessee was entitled to the benefit of Notification No. 2/95-C.E. for the disputed DTA clearances, subject to fulfilment of the notification's mandatory conditions.

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