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Issues: (i) Whether the Commissioner, in de novo adjudication, had correctly applied the proviso to Section 3(1) of the Central Excise Act, 1944 to clearances made by a 100% EOU into the DTA and correctly reworked the duty demand after allowing cum-duty benefit.
Analysis: The Commissioner followed the remand directions and examined the evidence and the assessee's objections. He rejected the contention that duty on DTA clearances of a 100% EOU was to be assessed under the main provision of Section 3 of the Central Excise Act, 1944, and held that such clearances attracted duty under the proviso to Section 3(1). He also rejected the plea for concessional treatment under Notification No. 2/95 for clandestine clearances. At the same time, he accepted that the amounts realised on account of clandestine clearances and undervaluation were to be treated as cum-duty values, and on that basis recomputed the duty liability and related penalties.
Conclusion: The finding and recomputation were upheld; the assessee's cum-duty benefit stood allowed, but the departmental challenge to the reduced duty demand failed.
Final Conclusion: No infirmity was found in the de novo adjudication, and the departmental appeal was rejected.
Ratio Decidendi: Clearances by a 100% EOU into the DTA are assessable under the proviso to Section 3(1) of the Central Excise Act, 1944, and amounts realised on clandestine clearances or undervaluation may be treated as cum-duty values for recomputing duty liability.
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