I am directed to draw your attention to Notification 8/87-CE dated 1.3.97 which exempts the finished products, rejects, wastes or scraps specified in the Schedule to the Central Excise Tariff Act, 1985 and produced or manufactured, in a 100% EOU or FTZ wholly from the raw materials produced or manufactured, in India and sold the DTA from the raw materials produced or manufactured, in India and sold the DTA from so much of duty of excise leviable thereon under Section 3 of the Central Excise Act, 1944, as in excess of an amount equal to duty of excise leviable under section 3 of Central Excise Act on like goods produced or manufactured in DTA and sold in India doubts have arisen regarding eligibility of the benefit of the said Notification in the following situations:

(i)       Where the EOUs/ Units in FTZs produce goods from both the indigenous and imported raw materials.

(ii)      Whether the term 'raw-materials' appearing in Notification No. 8/97-CE would cover within its purview the consumables as well.

2.     The matter has been examined by the Board and it is clarified that:

a.     In respect of situation (i) above the benefit of Notification 8/97-CX dated 1.3.97 cannot be extended to those units, which manufactured goods out of both imported and indigenous raw material. The benefit is available to those units, which manufacture goods only from indigenous raw materials.

b.     In respect of situation (ii) a Unit is eligible for the benefit of Notification 8/97-CX, ibid, even if, imported consumables are used since the Notification does not debar the use of imported consumables, provided other conditions of the said Notification are satisfied.

3.     All pending disputes may be decided in light of aforesaid clarification.