JUDGMENT K.S. Jhaveri, J. - By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the Department reversing the view taken by CIT (A) (Annex.2), dated 26-5-2005. 2. This Court while admitting the appeal, framed the following substantial question of law : "Whether in the facts and circumstances of the case the CESTAT being the last fact finding body was justified in drawing conclusion that appellant has taken no permission to sell the goods in DTA, when there was no need of permission as per EXIM Policy para 9.9 for the period 1997-2002 ? 3. The facts of the case are that the appellant-company is by status a 100% EOU unit licenced under section 58 and 69 of the Customs Act, 1962 and is engaged in manufacturing of halogen lamps classifiable under Chapter Heading No. 8539.90 of the Central Excise Tariff Act, 1985. The appellant was granted letter of permission/intent by the Development Commissioner, New Export Process Zone (NEPZ), Noida for granting 100% EOU status in lieu of fulfilling export obligations. Further with a condition to abide by the provisions of EXIM Policy from time to time. The appellant company is importing and purchasing inputs/raw material from the indigenous market as well as for the manufacture of auto halogen lamps which are cleared for export as well as in the domestic tariff area (DTA) as per the norms given in letter of intent, EXIM Policy and Notification No. 2/95-C.E. On 24-2-1999, on physical verification and comparison of goods with the stock register by Anti-Evasion Wing of Central Excise, a shortage of 13885 number of auto halogen bulbs and shortage of 9684 rejected bulbs was found. Apart from short payment of duty paid on waste and scrap which amounted to duty to the tune of Rs. 286447/-, 38241/- and 28546/- respectively. Pursuant to search, a show cause notice dated 22-6-2001 was issued after recording statements under section 14 of the Central Excise Act, wherein it was admitted that appellant has deposited the disputed amount voluntarily prior to issuance of show cause notice, but still demand under section 11A and penalty under section 11AC were demanded. 4. 286447/-, 38241/- and 28546/- respectively. Pursuant to search, a show cause notice dated 22-6-2001 was issued after recording statements under section 14 of the Central Excise Act, wherein it was admitted that appellant has deposited the disputed amount voluntarily prior to issuance of show cause notice, but still demand under section 11A and penalty under section 11AC were demanded. 4. Counsel for the appellant pointed out provisions of Section 3(1) of the Central Excise Act and has taken us through the order of AO wherein the AO observed as under : "(iv) The assessee have not violated the provisions of para 9.9(c) of Import & Export Policy as well as para 9.20, 9.23, and 9.24 of the Hand Book of Procedure and also the provisions of Central Excise Law in as much as the accountal of the goods was not properly made and could not be explained to the Central Excise officers at the time of their visit. The Penalty is not imposable. It was submitted that the entire duty amount which was calculated by the Central Excise officer was immediately deposited, though the amount calculated should have been in accordance with the provisions of Notification No. 2/95-C.E., dated 4-1-1995 as amended. Therefore, the assessee deposited much more duty as was required to be paid. The refund has been requested in the preceding paras. Since the assessee have deposited duty much earlier that the issue of the show cause notice, the penalty under section 11AC of the Central Excise Act, 1944 and Rule 209 of the Central Excise Rules, 1944 is not imposable. She placed reliance on the following decisions of Hon''ble Tribunals:- 1. Seimen Ltd. vs. CCE, Aurangabad - 1999 (34) RLT - 1331 (CEGAT) 2. Sub Zero Ice-cream (P) Ltd. vs. CCE, Banglore - 2001(97) ECR-299 (T.) 3. BPL Sanyo Utilities & Appliances Ltd. vs. Commissioner of Customs, Banglore - 2001 (46) RLT- 317 (CEGAT). Though the above decisions are in respect of Rule 173Q of the Central Excise Rules, 1944, it was submitted that these are equally applicable in respect of Rule 209A ibid. as the provision in both the Rules are similar. Since the duty involved has been deposited immediately after the detection, no interest under section 11AB ibid. is demandable in this case. 6. as the provision in both the Rules are similar. Since the duty involved has been deposited immediately after the detection, no interest under section 11AB ibid. is demandable in this case. 6. Assessee''s plea, that clearance of waste & scrap was in normal course and after paying the duty as per notification No. 2/95-C.E., dated 4-1-1995, is not acceptable as they had not obtained any permission for such clearance from the Development Commissioner under sub para (a) of the 9.9 of EXIM Policy. Therefore, benefit of notification No. 2/95-C.E., dated 4.1.95 is not available to them. Permission of the Development Commissioner is essential to be eligible to avail the benefit of this notification." 5. He has also contended with regard to the finding which has been given by the Commissioner (Appeals-I) after the remand which reads as under : "2. Brief facts of the Appeal are that the Appellants are engaged in the manufacture of Auto Halogen Lamps falling under Chapter sub heading no. 8539.90 to the Central excise Tariff Act, 1985. The officers of the Department visited the appellants premises on 24-2-1999, 25-2-1999 and 1-3-1999 and noticed following discrepancies. a. The appellants had short paid Central Excise duty amounting to Rs. 28,546/- on waste and scrap cleared by them. b. The shortage of 13885 nos of finished Auto Halogen Bulbs valued at Rs. 4,48,743/- involving Central Excise duty amounting to Rs. 2,86,447/- c. On comparison stock register for the year 1996-97, 1997-98, 1998-99, the officers found a shortage of 9684 rejected bulbs/capsules involving duty amounting to Rs. 38,241/-. 7. I have carefully gone through the case records, submissions already made in appeal memorandum and submissions made at the time of personal hearing. As per directions of the Hon''ble CESTAT, the issues to be decided are eligibility of the appellants for the benefit of Notification No. 2/95-C.E., dated 4-1-1995 and imposition of penalty, taking into consideration the decision of the Larger Bench of the case of Himalaya International Ltd. - 2003 (154) E.L.T.580 (Tri - LB) . As per directions of the Hon''ble CESTAT, the issues to be decided are eligibility of the appellants for the benefit of Notification No. 2/95-C.E., dated 4-1-1995 and imposition of penalty, taking into consideration the decision of the Larger Bench of the case of Himalaya International Ltd. - 2003 (154) E.L.T.580 (Tri - LB) . I find that Hon''ble Tribunal in the case of Himalaya International Ltd. [ 2003 (154) E.L.T. 580 (Tri.- LB)] has held that "Export Oriented Units - Rate of duty applicable to permission of Development Commissioner - Goods produced and manufactured by 100% EOU and sold in excess of the permission granted cannot come under the Section 3(1) of the Central Excise Act, 1944 - so long as on 100% EOU continues as an EOU it will be within the proviso to section 3(1) ibid - Mere violation of the permission in the matter of sale to DTA will not take it outside the proviso." 5.1 He contended that in view of EXIM policy 9.9 clause (b) which reads as under :- "(b) DTA sale upto 50% of the FOB value of exports may be made subject to payment of applicable duties and fulfillment of minimum NFEP prescribed in appendix 1 of the Policy. In the case of EOU/EPZ units in toys, agriculture, including agro-processing, acquaculture, animal husbandry, biotechnology, floriculture, horticulture, poultry, viticulture and sericulture such sales may be subject to positive NFEP only. No DTA sale shall be permissible in respect of motor cars, alcoholic liquors and such other items as may be stipulated by Director General of Foreign Trade by a Public Notice issued in this behalf." 5.2 It is contended that the intimation was sent by letter dated 2-6-1998 which reads as under : Office of the Assistant Commissioner Central Excise Division Jaipur(U) C.No. VIII 40/12/AC/EOU/98/5583 Dt. 2-6-1998 To The Superintendent Central Excise Range VKIA III Jaipur Sub :- M/s. Autolite (India) Ltd. Jaipur 100% EOU request for permission for DTA sale at concessional rate of Duty. Please refer to your office letter C No. CE-20/AC/VKI III/PR/98/374 dt. 21-5-1998 on the above subject enclosing the above units request letter No. AC/100/EOU/98-99 dt.20-5-1998 As per the Assistant development commissioner NEP2 Noida letter No. NEP2/3-4/91-100% EOU/3037, dated 1-5-1998 this office is pleased to grant permission for the sale of 743181 Nos of Halogen Lamps for a total value of Rs. 21-5-1998 on the above subject enclosing the above units request letter No. AC/100/EOU/98-99 dt.20-5-1998 As per the Assistant development commissioner NEP2 Noida letter No. NEP2/3-4/91-100% EOU/3037, dated 1-5-1998 this office is pleased to grant permission for the sale of 743181 Nos of Halogen Lamps for a total value of Rs. 216.25 Lacs on payment of the applicable duties and taxes leviable there on as per Notification 2/95-C.E., dated 4-1-1995 as amended vide Notification No. 4/98-C.E., dated 244-1998. Sd/- Assistant Commissioner 5.3 He contended that the said letter was not produced before the authority and under clause (b), he is entitled for the exemption and in view of intimation sent, he is not liable to take permission and pay 50% duty payment and he has paid 25%, he should be allowed exemption being 100% export oriented unit and he should be allowed to take goods which is on retraction being not of export quality for the disposal in the local area. 5.4 However counsel for the respondent contended that the tribunal while considering the case held as under : "Since admittedly, no permission was obtained, and the goods were not allowed to be sold in India, as contemplated by the provisions of the Act, rules and the EXIM Policy, the benefit of the said notification, which was available only in cases where the goods were allowed to be sold was not available to the respondent. There is also no substance in the contention that there is no challenge against the findings of the Commissioner (Appeals) that the benefit of the Notification No. 2/95 was not available to the respondent. There is also no substance in the contention that there is no challenge against the findings of the Commissioner (Appeals) that the benefit of the Notification No. 2/95 was not available to the respondent. The impugned order of the Commissioner (Appeals) cannot, therefore, be sustained and is hereby set-aside and the order of the adjudication authority stands restored." 5.5 He also contended that exemption under the notification shall not be availed until the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the said goods, including software, rejects, scrap, waste or remnants and pointed out the following conditions :- (a) being cleared for home consumption, other than scrap, waste or remnants are similar to the goods which are exported or expected to be exported from the units during specified period of such clearances in terms of Export and Import Policy, (b) the total value of such goods being cleared under paragraph 6.8 of the Export and Import Policy, for home consumption from the unit does not exceed 50% of the free on board value of exports made during the year (starting from 1st April of the year and ending with 31st March of next year) by the said unit; and (c) The balance of the production of the goods which are similar to such goods under clearance for home consumption, is exported out of India or disposed of in terms of paragraph 6.9 of the Export and Import Policy. Provided also that the clearance of goods for home consumption under paragraphs 6.8(b) and 6.8(h) shall be allowed only when the unit has fulfilled the minimum Net Foreign Exchange Earning as a Percentage of Exports (NFEP) prescribed in Appendix-I of the Export and Import Policy: Provided also that the clearance of goods for home consumption under paragraph 6.8(a) in excess of 50% of Free on Board value of exports made by the said unit during the year (starting from 1st April of the year and ending with 31st March of the next year) shall be allowed only when the unit has fulfilled the minimum Net Foreign Exchange Earning as a Percentage of Exports (NFEP) prescribed in Appendix I of the said Policy. 5.6 It is contended that letter dated 2-6-1998 is much prior to inspection which was carried out on three dates which are given in the order of Commissioner namely 24-21999, 25-2-1999 and 1-3-1999 in spite of that certain deficiencies were found. 6. We have heard the learned counsel for the parties. 6.1 Taking into consideration the very object of 100% export oriented and exemption of excise duty is to have earning of foreign exchange, if without prior permission of the authority, local sale is allowed then it will lead to loss of excise duty and if the prior permission is not taken, without permission, the export will not be done and locally goods will be disposed of. 6.2 In that view of the matter, clause 9.9 is to be read as intimation subject to proviso they have to take permission of the competent authority. 7. In that view of the matter, the issue is decided in favour of Department against the assessee. 8. The appeal stands dismissed.