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2014 (5) TMI 452 - AT - Central Excise100% EOU - non payment of Countervailing Duty including SAD on goods cleared to sister DTA units - revenue neutral exercise - exemption under Notification No.23/03-Cus. dated 31.03.2003 - Held that - Though the decision in the case of Moser Bear Indi Ltd 2009 (6) TMI 48 - CESTAT, NEW DELHI prima facie supports the case of the appellant, due weight has to be given to revenue neutrality at this tage of considering stay petition. However at this stage, we cannot, go entirely by the argument of revenue neutrality because we do not know whether the bulk drugs in question had gone into the manufacture of dutiable drugs in their sister units. Therefore, we are inclined to follow the earlier order of pre-deposit as wherein the direction was to deposit 50% of the total Excise Duty. - stay granted partly.
Issues:
- Valuation dispute - Liability for Special Additional Duty - Application of Education Cesses Valuation Dispute: The case involved a 100% Export Oriented Unit (EOU) that cleared goods to sister units in the Domestic Tariff Area. The Revenue alleged that appropriate Excise Duty was not paid for the period from 01.08.2007 to 31.03.2008 and 01.04.2008 to 27.03.2009. The Counsel for the applicant argued that the valuation adopted was incorrect, but this issue was not extensively discussed as similar matters were previously heard by the Tribunal, and a pre-deposit of 50% of the disputed demand was ordered. The applicant contended that the payment of Countervailing Duty (CVD) including Special Additional Duty (SAD) would have been revenue-neutral as the buyer in the Domestic Tariff Area could claim credit for such duties, and this aspect should be considered while ordering pre-deposit. Liability for Special Additional Duty: Regarding the liability for Special Additional Duty (SAD), the applicant claimed exemption under Notification No.23/03-Cus. dated 31.03.2003, stating that there was no liability as the goods were stock-transferred without involving a sale. The Counsel relied on a decision of the Larger Bench of the Tribunal in support of this argument. However, the Authorized Representative for the Revenue contended that a pre-deposit on account of SAD was required based on a subsequent decision that favored the Revenue. Application of Education Cesses: The dispute also involved the application of Education Cesses three times in the calculation of the differential duty payable. The Counsel for the applicant relied on a decision of the Larger Bench of the Tribunal to support their argument against the multiple applications of Cesses. The Tribunal considered the submissions from both sides and, while acknowledging that a previous decision supported the appellant's case, emphasized the importance of considering revenue neutrality. The Tribunal ultimately ordered the applicant to make a pre-deposit of Rs.3.10 crores and Rs.4.47 crores within eight weeks for the two respective periods, excluding the Cesses included in the computation for the third time. Compliance was to be reported by a specified date, and the appeal was to be tagged with a previous case after compliance.
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