2015 (3) TMI 252 - AT - Central Excise

Discharge of SAD on the goods cleared to D.T.A - Levy of 4% SAD on clearance of goods from 100% EOU - Held that - The appellants are export oriented unit and are eligible clear goods to DTA on payment of appropriate duty. In the case in hand, it is undisputed that appellants had discharged appropriate Central Excise duty on the goods cleared to their sister unit located in D.T.A. They had not discharged SAD on the premise that transactions between sister unit cannot be considered as sale transaction. demand on the ground that the assessee has not paid Service Tax would require the assessee to pay SAD, has been negatived - Following decision of M/s Micro Inks Ltd vs CCE&ST, Daman 2014 (2) TMI 207 - CESTAT AHMEDABAD - Decided in favour of assessee.

Summary

Issues:
The issue involves the discharge of Special Additional Duty (SAD) on goods transferred to a sister unit in the Domestic Tariff Area (DTA) by an export-oriented unit (EOU).

Analysis:
The judgment addresses three appeals with a common issue of SAD payment on goods transferred to a sister unit in the DTA by the appellant, an EOU. The appellant had paid Central Excise duty but not the SAD. The appellant argued that transactions between sister units should not be treated as sale transactions. The counsel referred to a previous judgment in a similar case. The Departmental Representative supported the lower authorities' findings.

Upon review, the Tribunal found that the issue centered on the discharge of SAD on goods cleared to the DTA by the appellant. While the appellants paid appropriate Central Excise duty, they did not pay SAD, claiming transactions with the sister unit were not sales. The Tribunal compared the present case with a previous judgment involving a similar issue. In that case, it was concluded that the demand for SAD due to non-payment of Service Tax was not valid, ruling in favor of the assessee.

Consequently, the Tribunal set aside the impugned orders and allowed the appeals with any consequential relief. The decision was based on the precedent set in the earlier judgment, maintaining consistency in the interpretation of the law regarding SAD payment by EOUs on goods transferred to sister units in the DTA.