Duty-free clearance by a 100% EOU under Rule 13 was permissible where Chapter X procedure was followed.

Rule 13 of the Central Excise Rules, 1944 and Notification No. 47/94-C.E. (N.T.) were available for clearances by a 100% Export Oriented Undertaking to a manufacturer-exporter against CT-2 certificate, because Chapter VA contained no express bar and Rule 100H did not exclude Rule 13. The notification operated subject to compliance with the Chapter X procedure, and the proviso to Section 5A of the Central Excise Act, 1944 did not apply because the notification was not issued under that section. The practical effect was that duty-free clearance under Rule 13 was permissible for a 100% EOU when the prescribed procedure was followed.

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Issues: Whether Rule 13 of the Central Excise Rules, 1944 and Notification No. 47/94-C.E. (N.T.) dated 22-2-94 were applicable to clearances made by a 100% Export Oriented Undertaking to a manufacturer-exporter on the strength of CT-2 certificate.

Analysis: Rule 13 permitted removal of materials without payment of duty for manufacture in bond of export goods, and the notification issued thereunder allowed such removals subject to compliance with Chapter X procedure. The provisions of Chapter VA governing 100% EOUs did not contain any express bar against such removals. Rule 100H excluded certain specified rules from application to goods manufactured by a 100% EOU, but did not exclude Rule 13. The proviso to Section 5A of the Central Excise Act, 1944 was also inapplicable because Notification No. 47/94-C.E. (N.T.) was not issued under Section 5A.

Conclusion: The benefit of Notification No. 47/94-C.E. (N.T.) was held available to the appellants, and the clearance under Rule 13 was held permissible for a 100% EOU.

Ratio Decidendi: In the absence of an express exclusion, a 100% Export Oriented Undertaking could avail Rule 13 and the notification issued thereunder for clearance of goods without payment of duty when the prescribed Chapter X procedure was followed.

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