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of <h1>Successful Revision Application Grants Absolute Duty Exemption for Exported Goods by 100% EOU</h1> <h3>IN RE: VANASTHALI TEXTILE INDUSTRIES LTD.</h3> IN RE: VANASTHALI TEXTILE INDUSTRIES LTD. - 2012 (281) E.L.T. 727 (G. O. I.) Issues:- Interpretation of Notification No. 24/2003-C.E., dated 31-3-2003 regarding duty exemption for 100% Export Oriented Units (EOU).- Eligibility of 100% EOU for rebate claims on duty paid for exported goods.- Application of Section 5A(1A) of the Central Excise Act, 1944 on duty exemption.- Compliance of EOU status with duty payment and rebate claims.Analysis:The judgment involves a revision application filed by the Commissioner of Central Excise Jaipur-I against an Order-in-Appeal regarding rebate claims by a 100% EOU, M/s. Vanasthali Textile Industries Ltd., Rajasthan. The main contention was whether the EOU was required to export goods on payment of duty to be eligible for rebate claims. The Commissioner (Appeals) had rejected the appeal of the department, leading to this revision application.The key issue revolved around the interpretation of Notification No. 24/2003-C.E., dated 31-3-2003, which granted absolute exemption from duty for goods manufactured by 100% EOU and cleared for export. The government analyzed the legal provisions, including Sub-section (1A) of Section 5A of the Central Excise Act, 1944, which declared that no duty shall be paid on goods granted absolute exemption. The government noted that the EOU scheme required all goods to be cleared for export without any condition for availing exemption, contrary to duty payable on DTA clearances.The government emphasized that the exemption under the notification was unconditional for goods cleared for exports by 100% EOU. Therefore, the manufacturer cannot pay duty on such goods. Citing relevant case law and a clarification by C.B.E. & C., the government concluded that rebate claims on duty paid for exported goods were inadmissible under the Central Excise Rules, 2002. Consequently, the government set aside the impugned orders and allowed the Revision Application, stating that the EOU did not have the option to pay duty and claim rebate afterward.In conclusion, the Revision Application succeeded on the grounds of the absolute exemption provided under Notification No. 24/2003-C.E., dated 31-3-2003, and the application of Section 5A(1A) of the Central Excise Act, 1944. The government's decision was based on a strict interpretation of the legal provisions and relevant precedents, leading to the allowance of the Revision Application and the setting aside of the impugned orders.
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