2025 (8) TMI 168 - AT - Service Tax

100% EOU Entitled to Exemption Under Notification No. 23/2003-CE, Appeal Allowed Based on SC Precedent

The CESTAT Bangalore allowed the appeal concerning the entitlement for exemption under Notification No. 23/2003-CE for goods cleared into DTA by a 100% ... 100% EOU - manufacture and export of entitlement for claiming the exemption under N/N. 23/2003-CE dated 31.03.2003 for the goods cleared into DTA - HELD THAT:- Since the issue is no more res-integra and following the judgment of Hon'ble Supreme Court in COMMISSIONER VERSUS AUROBINDO PHARMA LTD. [2011 (7) TMI 1332 - SC ORDER] and also by considering the order of Commissioner (Appeals) dropping the demand for the subsequent period in Appellant's own case, the appeal is allowed with consequential relief, if any, in accordance with law. Appeal allowed. ISSUES: Whether a 100% Export Oriented Unit (EOU) is entitled to claim exemption under Notification No. 23/2003-CE dated 31.03.2003 for goods cleared into the Domestic Tariff Area (DTA).Whether spent solvents cleared into DTA can be classified under Sub-Heading 2942 0090 of CETA and avail exemption under Sl. No. 2 of Notification No. 23/2003-CE dated 31.03.2013.The applicability and binding nature of precedent decisions by higher appellate authorities on classification and exemption claims in similar circumstances. RULINGS / HOLDINGS: The Court held that the issue of entitlement of a 100% EOU to claim exemption under Notification No. 23/2003-CE for goods cleared into DTA is 'no more res-integra' and the appellant is entitled to the exemption.The classification of spent solvents under Sub-Heading 2942 0090 of CETA and the consequent benefit of exemption under Sl. No. 2 of Notification No. 23/2003-CE dated 31.03.2013 is 'settled in favor of the appellant' following binding precedent.The Commissioner (Appeals) and lower appellate authorities are 'bound to comply with the higher Appellate Authorities towing the principles of judicial discipline' in such matters. RATIONALE: The Court relied on the legal framework established by prior decisions of the Tribunal and the Hon'ble Supreme Court, including the affirmed decision that classified spent solvents under Sub-Heading 2942 0090 and allowed exemption claims under Notification No. 23/2003-CE.The principle of judicial discipline requires lower appellate authorities to follow the binding precedents set by higher courts and appellate tribunals, thereby precluding re-litigation of settled issues.The Court emphasized that the goods cleared into DTA being waste or spent solvents generated during production fall within the scope of exemption as per the established legal interpretations.