COMMNR. OF CENTRAL EXCISE, SURAT-I vs M/S. FAVOURITE INDUSTRIES

The Supreme Court examined the applicability of Notification No.8/97-CE dated 1.3.1997 concerning the exemption of excise duty for goods manufactured by a 100% Export Oriented Unit (EOU) using raw materials from another EOU. The Court held that the finished goods cleared in the Domestic Tariff Area (DTA) are entitled to the exemption under the specified notification, rejecting the adjudicating authority's view that only Notification No.2/95-CE dated 4.1.1995 could apply. The judgment clarified the interpretation of the relevant provisions under the Customs Act, 1962 and the Central Excise Rules, 1944, affirming the Tribunal's decision in favor of the assessee.