J. Chelameswar, C.J.

1. This is an appeal by the Revenue under Section 130 of the Customs Act, 1962 aggrieved by an order in Appeal No.Excise/840/04 on the file of the Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Bangalore.

2. The respondent Company is carrying on the activity of manufacture of Synthetic Rutile and Ferric Chloride. During the years 1996-97, 1997-98 and 1998-99 the respondent Company cleared 1003.75 Metric Tons of Synthetic Rutile concentrate valued approximately at Rs.2.25 crores to Domestic Tariff Area (DTA) without payment of duty under the Central Excise Act which is now estimated at Rs.18,07,997/-. The respondent did so because they claimed the benefit of notification No.4/97 CE dated 1.3.1997. The said notification admittedly grants complete exemption of the duty payable under the provisions of the Central Excise Act read with the Central Excise Tariff Act to ores falling under Chapter 26, Tariff Items 2601 to 2617 of the Central Excise Tariff Act. The said claim of the respondent was initially accepted by the department.

3. However, by a show cause notice dated 8.7.1998 the respondent was called upon to explain as to why the