Per Gowri Shankar : The appellant is a 100% export oriented unit (EOU) engaged in the manufacture of texturised polyester yarn and dyed polyester yarn. The question for consideration in this appeal is the rate of duty that will apply to that part of the production of these goods that it cleared to the domestic tariff area i.e. the domestic market.

2. In the order impugned in the appeal the Commissioner has held that the duty that should be paid on such clearances would, in accordance with the proviso under sub-section (1) of Section 3 of the Central Excise Act, 1944, be equal to the customs duty which will be leviable under Section 12 of the Customs Act, 1962 on like goods produced by a manufacturer outside India. He has held that the duty that should be paid was to be calculated, and also imposed a penalty on the appellant under Rule 173Q for various contravention. The Commissioner had rejected the contention taken before him that the benefit of Notification 53/97 would be available to these goods.

3. In our opinion he is right. The notification exempts from customs duty goods specified in the table to it imported into India or procured from a bonded warehouse for manufacture o