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2019 (2) TMI 1549 - AT - Central Excise100% EOU - Exemption from SAD - clearance of goods into DTA - demand of duty alongwith interest and penalty - period 01.03.2006 to 31.01.2008 - Clearance of bulk drugs to its sister units - stock transfer basis - N/N. 23/2003-CE dated 13.03.2003 - Held that - Revenue has not disputed the payment of VAT at the time of sale of goods by the respondent from its depot - In this context, the Tribunal in the case of Micro Inks v. Commr of C.Ex. & Service Tax, Daman 2014 (2) TMI 207 - CESTAT AHMEDABAD has allowed the appeal on the identical situation - appeal dismissed - decided against Revenue.
Issues:
- Appeal against dropping of proceedings initiated by show-cause notice - Demand of duty on clearance of goods into DTA - Exemption from payment of SAD - Interpretation of relevant notifications and case laws Analysis: 1. Appeal Against Dropping of Proceedings: The appeal was filed by Revenue against the impugned order passed by the Commissioner, Central Excise, Pune-III, dropping the proceedings initiated by a show-cause notice dated 10.02.2009. The Tribunal heard both sides and perused the records to consider the appeal. 2. Demand of Duty on Clearance of Goods into DTA: The case involved a 100% EOU engaged in the manufacture of Bulk Drugs formulation, facing a demand of duty of &8377; 78,62,545 due on the clearance of goods into DTA during a specific period. The adjudicating authority had confirmed a demand of duty in two parts: one related to goods cleared to the depot without payment of VAT, and the other concerning bulk drugs transferred to the sister unit in DTA on a stock transfer basis. 3. Exemption from Payment of SAD: The key issue revolved around the exemption from payment of Special Additional Duty (SAD) in relation to the clearance of goods. The Revenue contended that the exemption was not admissible to the respondent due to the non-payment of VAT on goods cleared to the sister unit in DTA. However, the respondent argued that they were eligible for the benefit of the exemption notification as the goods were not exempted from sales tax by the State Govt., fulfilling the conditions of the notification. 4. Interpretation of Relevant Notifications and Case Laws: The adjudicating authority's findings highlighted the distinction between the payment of VAT at the time of sale from the depot and the stock transfer of bulk drugs to the sister unit. The authority, in alignment with past decisions and case laws, concluded that the demand did not survive on merits as the issue was settled. The Tribunal also referred to precedents where similar situations had been resolved in favor of EOUs regarding the levy of SAD and exemption notifications. 5. Final Decision: After considering the facts, case laws, and submissions from both sides, the Tribunal found no reason to interfere with the impugned order. Consequently, the appeal filed by Revenue was dismissed, upholding the decision to drop the proceedings initiated by the show-cause notice. This detailed analysis of the judgment covers the issues raised in the appeal, the demands of duty, the exemption from payment of SAD, and the interpretation of relevant notifications and case laws, providing a comprehensive understanding of the legal aspects involved in the case.
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