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Why exemption from excise duty for EOUs?
In the Sterlite case mentioned above, benefit of Notification No. 125/84 was denied to the appellant. This notification exempted goods produced in an EOU from excise duty. The notification in another avatar, is still valid.
Notification No. 24/2003-C.E., dated 31-3-2003
exempts all excisable goods produced or manufactured in an export oriented undertaking from whole of duty of excise leviable thereon
Provided that the exemption contained in this notification in respect of duty of excise leviable under section 3 of said Central Excise Act shall not apply to such goods if brought to any other place in India;
What is the purpose of this notification? If goods are exported from EOU, which they are expected to do in the first place, there is no duty. If they are cleared in the DTA, they are required to pay duty. Then, why this exemption? Is it for captive consumption? What are the situations under which this exemption can be availed? Is there a single unit which has availed this exemption? Or is it standing in monumental isolation without serving any purpose?