Exemption for 100% EOU clearances required consideration of the Board circular; matter remitted for fresh scrutiny.

The exemption claim for clearances by a 100% EOU into the domestic tariff area turned on whether the benefit of Notification No. 8/97-C.E. could be denied without considering Board Circular No. 442/8/99-CX. The circular stated that the exemption could extend to units using imported and indigenous raw materials if the jurisdictional authorities were satisfied, on records and verification of the manufacturing process, that the inputs were indigenous. As the lower authorities had not examined the circular, the matter required fresh scrutiny by the original authority, and the exemption question was remitted for de novo consideration.

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Issues: Whether the benefit of the notified exemption could be denied without considering the Board's circular, and whether the matter required remand for fresh adjudication.

Analysis: The appellants had already deposited a substantial part of the demand, and the dispute turned on the applicability of the exemption notifications to clearances of 100% EOUs into the domestic tariff area. The Board's Circular No. 442/8/99-CX clarified that the benefit of Notification No. 8/97-C.E. could extend to units using imported as well as indigenous raw materials, provided the jurisdictional authorities were satisfied beyond doubt about the indigenous character of the inputs through records, physical scrutiny, verification, and examination of the manufacturing process. Since the lower authorities had not considered this circular, the matter required fresh scrutiny by the original authority.

Conclusion: The exemption issue was remitted for de novo consideration, and the appeal succeeded by way of remand.

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