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2014 (4) TMI 49 - AT - Central ExciseWaiver of pre-deposit of duty - Denial of benefit of Notification No. 23/2003-CE dated 31.3.2003 - Whether the applicant is entitled for the benefit of Notification No. 23/2003-CE - Held that - contention of the applicant is that the goods in question i.e. tractors are not exempted under the State Sales Tax. The applicants submitted that as per Schedule C of the State Act, tractors are liable to pay state tax @ 4% upto 31.3.2012 and thereafter @ 5%. The state government has granted exemption to the unit from their sales tax liability under the Package Scheme of Incentive 1993 - The fact that the tractors which are cleared to DTA by the applicants are not exempted from payment of sales tax or VAT under the Act. Therefore, prima facie the applicant has made out a case for waiver of the dues. Pre-deposit of the dues is waived and recovery thereof stayed for hearing of the appeals - Stay granted.
Issues:
- Whether the applicant is entitled to the benefit of Notification No. 23/2003-CE. Analysis: The case involved an application for waiver of pre-deposit of duty, interest, and penalties amounting to Rs. 2,10,81,29,744. The issue revolved around the denial of the benefit of Notification No. 23/2003-CE dated 31.3.2003 to the applicant, who is a 100% Export Oriented Unit (EOU) engaged in manufacturing tractors. The contention was that the benefit of the notification was wrongly denied because the tractors were not exempted under the Maharashtra Value Added Tax Act, 2002, and the unit was granted a special concession exempting it from VAT liability under the Package Scheme of Incentives 1993. On the other hand, the Revenue argued that since no sales tax or VAT was paid on the tractors cleared to the Domestic Tariff Area (DTA), the benefit of the notification was not available. Additionally, the Revenue highlighted discrepancies in the Duty Exemption Certificate issued by the State Government. The crux of the matter was the interpretation of Notification No. 23/2003-CE, which exempts excisable goods produced in an EOU and brought to any other place in India subject to certain conditions. The relevant portion of the notification was reproduced to determine the applicability of the exemption. The notification specified that the exemption is available if the goods being cleared into the DTA are not exempted by the State Government from payment of sales tax. The applicant argued that tractors were not exempted under the State Sales Tax Act and were liable to pay state tax as per the Act. Consequently, the applicant contended that they were entitled to the benefit of the notification. After considering the arguments, the Tribunal found that the tractors cleared to DTA were not exempted from sales tax or VAT under the State Act. Therefore, the Tribunal held that the applicant had made a prima facie case for waiver of the dues. As a result, the pre-deposit of the dues was waived, and the recovery stayed for the hearing of the appeals. The Registry was directed to list the appeal for further proceedings.
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