TaxTMI 
TaxTMI 
2019 (12) TMI 1058
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....upees Three Lakhs Ninety Thousand Eight Hundred and Seventy Three only) demanded in the show-cause notice with interest but no penalty was imposed by the Commissioner (Appeals). 2. Briefly the facts of the present case are that the appellant is working as a 100% EOU for the manufacture and export of fruit and vegetables. During the period October 2004 to October 2006 the appellant had procured insecticide by the name 'Neemazol TS 1%' falling under Chapter Heading 3808.10 of Central Excise Tariff Act without payment of duty in terms of exemption provided under Notification No. 22/2003-CE dated 01.03.2003. Later on, it appeared to the Department that the appellants were not entitled to procure the item in question in terms of the Notificatio....
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....n dropped by the Deputy Commissioner on the ground that the item procured by the appellants were covered by Sl. No. 26 appearing in Annexure-I to Notification No. 22/2003-CE dated 01.03.2003 read with Clause (a)(i) read with Clause 5 of the said Notification. He further submitted that the Commissioner (Appeals) has wrongly held that the EOU was governed by Clause 5(b) of the Notification and only item covered under Sl. No. 4 to 12 of Annexure-I could be given to farmers. He further submitted that the item in question 'Neemazol TS 1%' was procured without payment of duty in terms of Notification No. 22/2003 which is covered in Sl. No. 26 of Annexure-I of the said Notification. The said insecticide procured by the appellant was sent to farmer....
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....ack to the EOU and later exported after undertaking further processing. We have gone through the orders of Deputy Commissioner dropping the demand and clearly holding that appellants are entitled to the exemption. It is relevant to reproduce the findings of Deputy Commissioner which is reproduced herein below: ".....I have carefully gone through the case proceedings and the submissions made by the party. M/s. Calypso Foods (P) Ltd., Hassan is a 100% EOU issued with the letter of permission No. 1:38;2003;PER;EOU CSEZ dated 31-07-2003 for the processing of fruits and vegetables for export under the EOU Scheme in CSEZ, Ministry of Commerce. The party is permitted to procure goods either through import or indigenously for the manufacture/prod....
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....iz. 'Neemazol TS 1%' is an insecticide and is supplied by the party to their farmers to be used on the gherkins which are applied by the farmers for further processing by the user industry for export. Since the goods viz. 'Neemazol TS 1%' is an insecticide and is covered by the notification as permissible to be procured indigenously without payment of duty and since there is no doubt regarding the usage of the product in the growth of gherkins by the farmers and the gherkins are supplied by the farmers to the party for further export the question of denial of the benefit of Notification No. 22/2003-CE dated 31.03.2003 does not arise." 6.1. Further, we find that the Commissioner (Appeals) has wrongly held that the appellant is required to t....