Deemed export performance under Notification No. 2/95-CE supports duty relief for domestic clearances by a 100% export-oriented unit.

Notification No. 2/95-CE was applied to determine the duty rate on domestic tariff area clearances by a 100% export-oriented unit where the claim rested on deemed export performance. The central question was whether the exemption extended only to clearances backed by physical export performance or also to clearances linked to deemed exports. CESTAT followed an earlier Tribunal view relied on by the first appellate authority and saw no basis to depart from it merely because Revenue had appealed that earlier ruling. The benefit of the notification was held available, and the Revenue's appeal was rejected.

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Issues: Whether the benefit of Notification No. 2/95-CE was available for determining the rate of duty on goods cleared in the domestic tariff area by a 100% export-oriented unit on the basis of deemed export performance.

Analysis: The dispute turned on whether the exemption attached only to domestic clearances supported by physical export performance or also extended to clearances linked to deemed export performance. The matter was already covered by an earlier Tribunal decision cited by the first appellate authority, and no reason was found to depart from that view merely because an appeal against the earlier decision had been filed by the Revenue.

Conclusion: The benefit of Notification No. 2/95-CE was held to be available, and the Revenue's appeal was rejected.

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