EOU DTA clearances and duty computation upheld where policy clarification supported concessional treatment.

Duty on EOU clearances was computed on the basis of the applicable customs-duty structure, and the revenue challenge on the calculation method was rejected in line with binding Supreme Court authority. The document also explains that DTA clearances of manufactured goods by a 100% EOU were held eligible for concessional duty under the notification because the Development Commissioner clarified, under the Handbook of Procedures, that such goods could be cleared to the DTA in totality rather than item by item. On that basis, the concession was sustained and the assessee's duty benefit was upheld.

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Issues: (i) Whether duty on clearances was to be computed on 50% of each customs duty or on 50% of the aggregated customs duties. (ii) Whether DTA clearances of manufactured goods by the EOU were entitled to concessional duty under the notification in view of the Development Commissioner's clarification.

Issue (i): Whether duty on clearances was to be computed on 50% of each customs duty or on 50% of the aggregated customs duties.

Analysis: The question was stated to be covered against the Revenue and in favour of the assessee by the decision of the Supreme Court. In view of that binding position, the issue did not survive for further consideration.

Conclusion: The issue was answered in favour of the assessee.

Issue (ii): Whether DTA clearances of manufactured goods by the EOU were entitled to concessional duty under the notification in view of the Development Commissioner's clarification.

Analysis: The assessee was permitted to manufacture specified goods as a 100% EOU and was entitled to sell manufactured goods in the Domestic Tariff Area to the extent allowed by policy. The Development Commissioner clarified that, under the Handbook of Procedures, the manufactured goods could be cleared to the DTA in totality and not with reference to specific items. The Tribunal's decision rested on that clarification, and the clarification supported the view that the concession under the notification extended to the disputed clearances.

Conclusion: The issue was answered in favour of the assessee.

Final Conclusion: The appeal failed because the Revenue's questions did not warrant interference, and the assessee's entitlement to the disputed duty benefit was sustained.

Ratio Decidendi: Where the competent authority clarifies that an EOU may clear its manufactured goods to the DTA in accordance with policy, the concession available under the applicable notification cannot be denied on the basis of a narrower item-specific permission.

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