In Brief
Universal Ferro & Allied Chemicals Ltd. (UFAC), a 100% Export Oriented Unit, processed raw materials supplied by Tata Iron & Steel Company into Silicon Manganese and returned the finished goods for domestic sale after paying central excise duty. The Revenue denied the concessional duty exemption, arguing that such job-work violated the EXIM Policy and that goods brought to India from an EOU must be taxed as imports. The Supreme Court upheld the CESTAT's decision, holding that UFAC satisfied all three conditions for exemption: the goods were EOU-produced, made from Indian raw materials, and sold in the domestic market with the Development Commissioner's permission under EXIM Policy paragraph 9.9(b). The Court rejected the Revenue's argument that the 'sale' definition in the Sale of Goods Act applies to excise law, and found no implied repeal of the exemption notification despite statutory amendments.
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