Exemption for reprocessed plastic goods in India applied to EOU DTA clearances, barring additional customs duty.

Exemption under Notification No. 5/98-C.E. and Notification No. 5/99-C.E. was available for plastic materials reprocessed in India from specified scrap or waste, and the clearances of reprocessed plastic granules and agglomerates by a 100% EOU into the Domestic Tariff Area fell within that scope. The view that DTA clearances by a 100% EOU were excluded because the goods were deemed imported was rejected. A Board circular denying the exemption to EOUs was treated as contrary to binding judicial precedent, so additional duty of customs could not be demanded on the clearances in question.

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Issues: Whether the benefit of Notification No. 5/98-C.E. and Notification No. 5/99-C.E. was available to a 100% Export Oriented Unit clearing reprocessed plastic granules and agglomerates into the Domestic Tariff Area, and whether additional duty of customs countervailing duty could be demanded on such clearances.

Analysis: The exemption notifications covered plastic materials falling under the specified tariff headings when they were reprocessed out of scrap or waste of the prescribed goods and such reprocessing was done in India. The record showed that the scrap used fell within the specified chapters and that the reprocessing was carried out in the unit located in India. The premise that DTA clearances by a 100% EOU were outside the scope of the notifications because the goods were deemed imported was rejected. The Board circular denying the exemption to EOUs was held to be contrary to law in binding judicial precedents, and the same reasoning governed the present dispute.

Conclusion: The exemption was available and no additional duty of customs could be demanded on the clearances in question.

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