EOU DTA clearances may qualify for exemption under the applicable serial entry if its own conditions are met.

A 100% EOU making DTA clearances under paragraph 6.8(h) of the Foreign Trade Policy could claim Sl. No. 1 of Notification No. 23/2003-C.E. because that entry applies to goods manufactured in an EOU and brought into India in accordance with the Policy, subject only to its own condition that the goods are not exempt from sales tax or VAT. Sl. No. 2 was treated as limited to DTA clearances within the entitlement under paragraph 6.8(a), (d), (e) and (g), and no restriction was read into Sl. No. 1 from that entry or from the Development Commissioner's limit. On that basis, a prima facie case for waiver of pre-deposit was made out and stay was granted.

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Issues: Whether the goods cleared by a 100% EOU into the Domestic Tariff Area under paragraph 6.8(h) of the Foreign Trade Policy were eligible for the benefit of Sl. No. 1 of Notification No. 23/2003-C.E., and whether the appellant had made out a prima facie case for waiver of pre-deposit of duty, interest and penalty.

Analysis: The notification grants exemption to excisable goods manufactured in an EOU and brought to any other place in India in accordance with the Foreign Trade Policy, subject to the conditions in the Table. Sl. No. 1 and Sl. No. 2 operate on different bases: Sl. No. 2 is tied to DTA clearances within the specified entitlement under paragraph 6.8(a), (d), (e) and (g), while Sl. No. 1 applies to DTA clearances made in accordance with the Policy subject to Condition No. 1, namely that the goods are not exempt from sales tax or VAT. Paragraph 6.8(h) also permits DTA sale of finished products against full duty on compliance with its requirements. On this reading, there was no restriction in the notification preventing an assessee from claiming Sl. No. 1 for clearances beyond the Development Commissioner's permitted limit, and the Department had not shown any breach of Condition No. 1.

Conclusion: The appellant was found to have a prima facie entitlement to the benefit of Sl. No. 1 of Notification No. 23/2003-C.E., and the plea for waiver of pre-deposit was accepted.

Final Conclusion: The stay application was allowed and pre-deposit of the entire duty, interest and penalty was waived pending disposal of the appeal.

Ratio Decidendi: Where an exemption notification provides separate conditions for different serial entries, the benefit cannot be denied by importing a restriction not found in the text of the notification, and DTA clearances made in accordance with the Foreign Trade Policy may qualify under the applicable serial entry if its own conditions are satisfied.

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