EOU clearances to Domestic Tariff Area justified waiver of pre-deposit and stay of duty recovery on a strong prima facie case.

Clearances by a 100% Export Oriented Unit into the Domestic Tariff Area were treated as liable to duty under Section 3 of the Central Excise Act at an amount equal to the customs duties on like imported goods, but Notification No. 8/96-C.E. was noted as granting nil rate of duty for the relevant goods manufactured by such a unit and sold in India. On that basis, a strong prima facie case was found for interim protection, leading to waiver of pre-deposit and stay of recovery of the confirmed duty demand during pendency of the appeal.

---

---

Issues: Whether pre-deposit of the confirmed central excise duty was required to be waived, and whether recovery of the duty demand should be stayed during pendency of the appeal.

Analysis: The goods were cleared by a 100% Export Oriented Unit to the Domestic Tariff Area. The order notes that duty on such clearances is levied and collected under Section 3 of the Central Excise Act as an amount equal to the aggregate of customs duties on like imported goods. It also records that Notification No. 8/96-C.E. granted nil rate of duty to the relevant goods manufactured by a 100% Export Oriented Unit and allowed to be sold in India. On that basis, a strong prima facie case was found for grant of interim relief.

Outcome: The requirement of pre-deposit was waived and recovery of the duty demand was stayed during pendency of the appeal.

---