Export exemption upheld where goods were routed through another unit of the same undertaking and export obligation was fully met.

An export oriented undertaking remained entitled to exemption where the notification conditions were satisfied and 100 per cent of the manufactured goods were exported out of India. The fact that export was routed through another unit of the same undertaking was held immaterial because the exemption attached to the undertaking, not to the particular unit from which dispatch occurred. Once the export obligation was fulfilled, the basis for the duty demand, penalty and confiscation fell away, and the appeal was dismissed.

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Issues: Whether an export oriented undertaking was entitled to exemption where the export of the manufactured goods was effected from another unit of the same undertaking, and whether penalty and confiscation could be sustained.

Analysis: The undertaking had been granted the benefit of the exemption notifications subject to fulfillment of the export condition, and it was not disputed that 100 per cent of the manufactured goods had been exported out of India. The place from which the export was actually effected within the same undertaking was held to be immaterial, as the exemption attached to the undertaking that satisfied the notification conditions. In view of that finding, the basis for confirming the duty demand and for sustaining penalty and confiscation did not survive.

Conclusion: The assessee was entitled to the exemption, and the appeal was dismissed.

Ratio Decidendi: Where the export obligation under an exemption notification is fulfilled by the undertaking, the physical routing of export through one unit or another of the same undertaking does not defeat the exemption.

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