TaxTMI 
TaxTMI 
2004 (12) TMI 215
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....ssed by the Commissioner of Central Excise, Hyderabad-III Commissionerate, Hyderabad in respect of the first two appeals and by the Commissioner of Central Excise, Visakhapatnam in respect of the third appeal. 2. All the three appellants are 100% EOUs. The first two appellants cleared the goods without payment of duty to DFRC/ARO holders. The third appellant cleared the goods without payment of duty in terms of EXIM Policy 1997-2002 para 9.10(b) with supplies effected in Domestic Tariff Area (DTA) against payment in foreign exchange under permission from Development Commissioner, Visakhapatnam Export Processing Zone (VEPZ). The appellants contend that the goods cleared by them are exempted from Excise Duty vide Notification No. 125/84-C.E.....
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....y. In the instant case, the 100% EOUs i.e. the appellants have supplied goods against AROs. Shri Shiva Dass contended that under Notification No. 82/92-C.E., dated 27-8-1992 and Notification No. 28/01-C.E., dated 16-5-2001, the clearances made to the DFRC holders are exempted from only Basic Customs Duty and Special Additional Duty. However, these clearances have to pay countervailing duty, which is equal to the Excise Duty leviable. This is the stand of the Department. Hence, demands have been made and confirmed. However, the learned Advocate submits that the goods are exempted under Notification No. 125/84-C.E., dated 26-5-1984. This Notification exempts all excisable goods produced or manufactured in a 100% EOU from the whole of the duty....
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....ng to permissible DTA sales and also not covered by the expression "allowed to be sold in India" in Section 3 of the Central Excise Act, 1944 so as to bring such clearances out of ambit of exemption under Notification. In the above-mentioned case, the Tribunal has rejected the stay of operation of the order of the Commissioner (Appeals) who has held that Notification No. 125/84 is applicable to clearances against DFRC holders. The learned Advocate also urged the point that these clearances in terms of the EXIM Policy would be considered as 'deemed exports' and in any case, they would be entitled for refund of terminal Excise Duty and even if they pay duty they would be entitled for refund and, therefore, the whole exercise would be revenue ....
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....ppears to have been exempted from payment of Central Excise duty under Notification No. 125/84, dated 26-5-1984. However, the goods cleared by the assessee are neither earning foreign exchange nor revenue for exchequer. This may not be the intention of the Government. Therefore, the decision of Commissioner (Appeals) passing the benefit of exemption Notification No. 125/84, dated 26-5-1984 to those goods does not appear to be correct and is contrary to the provisions of law." A reading of the above ground shows that even the Revenue is of the view that Notification No. 125/84 covers goods cleared against foreign exchange. Further, it was urged that the clearances under para 9.10(b) also would not be covered by the clearances coming under t....