2000 (11) TMI 1174

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....factory were captively used in the manufacture of gear boxes. The gear boxes so manufactured were cleared on payment of Central Excise duty at the appropriate rates. However, the parts/components manufactured at the factory and captively used in the manufacture of gear boxes availed full exemption under Notification No. 217/86-C.E., dated 2-4-86 as amended. Some of the gear boxes manufactured by the appellants were supplied to the 100% Export Oriented Units (in short EOU) - M/s. Kudremukh Iron Ore Co. Ltd., Kudremukh and M/s. O.M.C. Alloys, Orissa without payment of duty by both the EOUs under Notification No. 123/81-C.E., dated 2-6-81 as amended. Since the appellants did not pay duty even in respect of parts/components used captively in th....

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.... the benefits mentioned therein to the 100% EOUs and this notification did not grant any exemption either in respect of such goods as such or to the manufacturer of such goods. It is argued that this position of law has since been clarified by the Central Government itself by making an amendment to Notification No. 217/86 by Notification No. 33/92-C.E., dated 1-3-92. The effect of this amendment is that the condition stipulated in the first proviso to Notification No. 217/86 will not apply to the unit in a free trade zone or to a 100% EOUs. It is contended that the amendment dated 1-3-92 in fact clarifies the decision which was all along inherent and implied in Notification No. 217/86. Ld. Advocate relied on the decision in Indian Aluminium....

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....ench in the decision in the case of M/s. L & T Ltd. (supra) came to the conclusion that amendment made to Rule 57C by Notification No. 4/92-C.E.(N.T.) dated 1-3-92 creating an exception in the Rule 57C to the effect that the Modvat credit could not be denied on the inputs if such final product was cleared either to the unit in a Free Trade Zone or a 100% EOU was a substantive amendment in the law and the same would have only prospective application. The present facts call for taking the same view. The amendment by Notification No. 33/92-C.E., dated 1-3-92 that the conditions stipulated in Notification No. 217/86-C.E., dated 2-4-86 will not apply to goods cleared either to units in FTZ or to 100% EOU will be effective from 1-3-92 and it will....