Exemption for food-industry waste in 100% EOUs applies to egg shell waste cleared into the domestic tariff area.

Egg shell waste cleared by a 100% export oriented unit was held eligible for exemption under Sl. No. 21 of Notification No. 23/2003-C.E. because the notification exempts waste from food industries manufactured in 100% EOUs, including residual waste that may otherwise be treated as manufactured goods. Following its earlier ruling on the same issue, the CESTAT Chennai held that such waste could be cleared into the domestic tariff area without payment of duty. The demand was therefore not sustainable.

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Issues: Whether egg shell waste cleared by a 100% export oriented unit was entitled to exemption from excise duty under Sl. No. 21 of Notification No. 23/2003-C.E. dated 31.03.2003.

Analysis: The Tribunal followed its earlier decision on the same issue and noted that Sl. No. 21 of Notification No. 23/2003-C.E. exempts waste from food industries manufactured in 100% EOUs. It was held that residual waste such as egg shell waste could be cleared into the domestic tariff area without payment of duty, and that the notification expressly covers even products which may otherwise be regarded as manufactured goods. On that basis, the benefit of the exemption was held available to egg shell waste.

Conclusion: The exemption under Notification No. 23/2003-C.E. was held applicable to egg shell waste, and the demand could not be sustained.

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