A show cause notice demanding customs duty was issued in case of clearance made by 100% export oriented undertaking (EOU) to domestic tariff area (DTA). Is the show cause notice defective in law? Explain in brief.

Yes, the show cause notice issued is defective in law as in respect of clearance made by a 100% Export Oriented Undertaking to Domestic Tariff Area the duty to be paid by the 100% EOU is the Duty of Excise (equal to custom duty) and not Custom Duty. Therefore, show cause notice using the word Customs Duty instead of Excise Duty is not maintainable.