DTA sale entitlement under export policy cannot be reworked by excise authorities when competent permission is already granted.

Notification No. 8/97-C.E. was construed to extend concessional duty to goods manufactured by a 100% EOU and sold in India in accordance with the Export-Import Policy. Where the Development Commissioner had already authorised DTA sales in a quantified value after accounting for physical exports and deemed exports, the excise authorities could not ignore that permission and recalculate the entitlement on the basis of physical exports alone. If the Revenue disputed the policy basis of the authorisation, the proper course was to approach the Development Commissioner. Clearance under the authorised excise permission and duty payment remained effective, so the notification benefit could not be denied on the exclusion of deemed exports.

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Issues: Whether the Revenue could deny the benefit of Notification No. 8/97-C.E. by restricting the export entitlement of a 100% EOU to physical exports alone and by excluding deemed exports, despite the Development Commissioner having permitted DTA sales in a fixed value under the Export-Import Policy.

Analysis: Notification No. 8/97-C.E. granted concessional duty to goods manufactured by a 100% EOU from indigenous raw materials and allowed to be sold in India in accordance with paragraph 9.9 of the Export-Import Policy. The Development Commissioner had already granted permission for DTA sales in a quantified value after taking into account both physical exports and supplies treated as deemed exports under paragraph 9.10. The Tribunal held that once the competent authority had issued the permission in terms of value, the Revenue could not disregard that authorization and rework the entitlement by substituting its own view that only physical exports should count. The proper course, if the Revenue disputed the basis of the permission, was to take the matter up with the Development Commissioner. The Tribunal also found that the goods had been removed under the relevant excise permission and on appropriate duty payment.

Conclusion: The Revenue was not entitled to deny the notification benefit or confirm duty on the ground that deemed exports were excluded from the DTA entitlement calculation; the assessee's clearance under the Development Commissioner's authorization remained valid.

Ratio Decidendi: Where a competent authority empowered under the governing export policy has granted DTA sale permission in quantified terms, the excise authorities cannot go behind that permission and re-determine the entitlement on a different interpretation of the policy, unless some independent condition of the exemption is shown to be violated.

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