Exemption for 100% export oriented undertakings and binding precedent on duty recomputation under additional excise notifications

A 100% export oriented undertaking was entitled to exemption from additional duty of excise under the operative notifications for AED(TTA) and AED(GSI) while those notifications remained in force, so the exemption was allowed for the relevant period. A recomputation of duty based on an earlier tribunal view could not be maintained once that view had been overruled by the Supreme Court, so the later binding precedent governed the duty calculation and the recomputation direction was sustained.

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Issues: (i) Whether the assessee was entitled to exemption from additional duty of excise under the notifications governing 100% export oriented undertakings in respect of AED(TTA) and AED(GSI). (ii) Whether the direction for recomputation of duty based on the Tribunal's earlier view could be sustained in light of the later Supreme Court ruling.

Issue (i): Whether the assessee was entitled to exemption from additional duty of excise under the notifications governing 100% export oriented undertakings in respect of AED(TTA) and AED(GSI).

Analysis: The relevant notifications exempted all excisable goods produced or manufactured in a 100% export oriented undertaking from the whole of the additional duty of excise leviable thereon. The exemption under the notification relating to the goods of special importance covered AED(GSI), while the notification relating to textiles and textile articles covered AED(TTA). The notifications were operative during the period in dispute and were later rescinded. On that basis, the assessee was entitled to exemption while the notifications remained in force.

Conclusion: The issue was decided in favour of the assessee and exemption from AED(TTA) and AED(GSI) was allowed for the relevant period.

Issue (ii): Whether the direction for recomputation of duty based on the Tribunal's earlier view could be sustained in light of the later Supreme Court ruling.

Analysis: The recomputation direction was founded on the Tribunal's earlier decision in Indoworth India Ltd. That view was subsequently overruled by the Supreme Court in Futura Polymers Ltd. The later binding precedent governed the manner of duty calculation, and the appellate order was upheld to that extent.

Conclusion: The issue was decided against the assessee on recomputation, and the direction based on the Supreme Court's later ruling was sustained.

Final Conclusion: The assessee succeeded on the exemption issue for the period when the notifications operated, but failed on the challenge to recomputation of duty, and the Revenue's challenge was rejected.

Ratio Decidendi: A 100% export oriented undertaking is entitled to the benefit of an exemption notification so long as the notification remains in force, and where an earlier tribunal view on duty computation is later overruled by the Supreme Court, the binding later precedent governs the recomputation exercise.

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