Similarity test for EOU clearances: diluted DTA goods were treated as prima facie similar to exported goods for exemption.

For exemption under Notification No. 23/03-CE, goods cleared by a 100% EOU to the DTA in diluted form were treated as prima facie similar to the exported concentrated goods because both belonged to the same nature and class. The notification's use of "similar" was read as broader than the earlier "identical" formulation in prior circular guidance. On that basis, the appellant was entitled to waiver of pre-deposit and stay of recovery pending appeal.

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Issues: Whether, for the purpose of exemption under Notification No. 23/03-CE dated 31.3.2003, the goods cleared to DTA by a 100% EOU in diluted form could be treated as similar to the exported concentrated goods.

Analysis: The benefit of the notification depended on the relationship between the exported goods and the goods cleared to DTA. The earlier circular clarifying Notification No. 2/95-CE treated "identical" goods as goods belonging to the same class or as similar goods. The present notification used the expression "similar" in place of "identical", indicating a broader and more apt formulation. Since the appellant exported ceramic colours and cleared ceramic colours to DTA, though in diluted form, the goods were prima facie of the same nature and class.

Conclusion: The goods cleared to DTA were prima facie similar to the exported goods, and the appellant was entitled to waiver of pre-deposit and stay of recovery pending appeal.

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