In Brief
A 100% export-oriented unit (EOU) manufacturing synthetic yarn was issued a show cause notice for alleged removal of goods without payment of excise duty. The unit claimed it was eligible for exemption when selling goods to the domestic market after obtaining permission. The issue was whether goods cleared to the domestic tariff area without Development Commissioner's permission attracted duty under the main section or a special proviso. The Supreme Court held that such clearances are assessable under the main Section 3(1) of the Central Excise Act, not under the proviso, following its earlier binding decision in SIV Industries Ltd. The tribunal's reliance on a distinguishing judgment was found erroneous. The appeal was allowed and the duty computation was directed to be recalculated accordingly."
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