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24 EXCISE LAW TIMES [ Vol. 372

clearances of the goods manufactured on the basis of job work had been ef-
fected on payment of duty vide Notification No. 8/97-Central Excise, dated
1-3-97 against permission for DTA sales granted by the Development
Commissioner SEEPZ, Mumbai from time to time.”
37. It could thus be clearly seen, that the Original Authority itself has
found that clearance of the goods manufactured on the basis of job work had
been effected on payment of duty vide Exemption Notification of 1997 against
permission for DTA sales granted by the Development Commissioner, SEEPZ,
Mumbai from time to time.
38. The combined reading of paragraph 9.9(b) of the EXIM Policy, the
Circulars issued by the Board, particularly, the Circular dated 22-5-2000 and re-
ply to the query of the Customs Authorities by the Development Commissioner,
SEEPZ would clearly show, that the UFAC was entitled to carry out the job work
on behalf of TISCO on payment of duty as provided under Exemption Notifica-
tion of 1997.
39. In this respect, it will also be apposite to refer to the Circular dated
6-5-2003 (No. 38/2003-Cus.) issued by the Board which would further clarify the
position, relevant part of which reads thus :
“I am directed to say that cases have been brought to the notice of the Board
that in case of stock transfer of goods to a DTA unit, EOUs were not being
allowed the benefit of payment of concessional duty under Notification No.
2/95-Central Excise, dated 4-1-1995 even though the EOU had a valid DTA
sale permission and had earned the DTA sale entitlement as provided un-
der paragraph 6.8 of the Exim Policy 2002-2007 (Paragraph 9.9 of the Exim
Policy 1997-2002) and fulfil other conditions specified in aforesaid notifica-
tion. The benefit of concessional rate of duty was being denied on the
ground that stock transfer of goods is not a sale and thus, not eligible for
concessional rate of duty in terms of the above notification.
2. The matter has been examined by the Board. Notification 2/95-C.E.,
dated 1-4-1995 provided for 50% exemption on….. “goods allowed to be sold
in India under and in accordance with the provisions of sub-paragraphs (a), (b), (d)
and (h) of para 6.8 (earlier para 9.9) of the Exim Policy”.... The notification,
therefore, allowed concessional duty only when goods were sold into DTA
in accordance with para 6.8 (or 9.9) of the policy. What is covered in para
6.8 (or 9.9) of the policy has been clarified by Ministry of Commerce in Ap-
pendix 14-IH of the Handbook of Procedures, 2002-2007 (Appendix 42 of
the Hand Book of Procedures Vol-I - 1997-2002) that it covers any clearance
to another DTA unit. Thus it is not open to the Department to interpret the
Exim Policy in any other manner than what has been mentioned in Appen-
dix 14-IH (or 42). The word DTA sale has been loosely used in the Exim
Policy and there is no definition of DTA sale in the Policy. Appendix 14-IH
(or 42) clarifies that it not only covers transfers through sales to DTA units
but also through other means. It would be illogical to contend that the con-
cession is available if the goods are transferred on sale to an independent
unit but it would not be available when removed on stock transfer to an-
other division/unit of the same company.”
40. We will now deal with the next submission made by Shri K. Radha-
krishnan, Learned Senior Counsel, to the effect that under proviso to sub-section
(1) of Section 3 of the Central Excise Act, 1944, an EOU is liable to pay duty on
the goods brought to a DTA, as if the goods were produced and manufactured
outside India and were imported into India as per the provisions of the Customs
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