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2016 (6) TMI 315 - AT - Central ExciseDemand of SAD alongwith interest and penalty - 100% EOU - stock transfer made to their own DTA unit - Eligibility for availment of exemption - Notification No. 23/2003-CE dated 31.3.2003 - Held that - the goods cleared by the appellant to their own unit is on stock transfer basis, the same goods cleared to any other DTA unit for the sale is on payment of the appropriate Sales Tax on the clearances made; there is no exemption granted by the Sales Tax authorities on the said goods. An identical issue has been decided by this Tribunal in the case of M/s Micro Inks Versus CCE. & ST. Daman 2014 (2) TMI 207 - CESTAT AHMEDABAD . Therefore, in view of this, the impugned order is unsustainable and liable to be set aside. - Decided in favour of appellant with consequential relief
Issues involved:
- Interpretation of Notification No. 23/2003-CE for exemption from Special Additional Duty (SAD) for a 100% Export Oriented Unit (EOU) on stock transfer to their own Domestic Tariff Area (DTA) unit. Detailed Analysis: The judgment involves an appeal against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Pune-III. The primary issue is whether the appellant, a 100% EOU manufacturing Heat Exchangers, is eligible for exemption under Notification No. 23/2003-CE dated 31.3.2003 for stock transfers to their DTA unit without paying SAD. The Revenue contends that since the appellant did not discharge Sales Tax liability on the stock transfers, they are not eligible for the exemption. The appellant, supported by judicial precedents like Micro Inks, VVF Ltd., and STI Industries, argues that the stock transfers do not amount to exemption from Sales Tax. The Tribunal examines whether the appellant qualifies for the exemption under the said notification. The Tribunal analyzes the facts and legal arguments presented by both sides. It notes that the goods cleared by the appellant to their DTA unit on a stock transfer basis do not attract Sales Tax, unlike clearances to independent buyers. The Tribunal refers to the judgment in the case of Micro Inks, where a similar issue was discussed. The Tribunal emphasizes that the absence of Sales Tax on inter-unit transfers does not automatically imply an exemption granted by the state government. It highlights that the eligibility for the exemption under Notification No. 23/2003-CE is contingent upon the goods not being exempted from Sales Tax by the state government. The Tribunal rejects the Revenue's reliance on the Johan Deere case, where the appellant was exempted from Sales Tax by a notification, unlike the present case. Based on the judicial pronouncements and the specific circumstances of the case, the Tribunal concludes that the impugned order is unsustainable. It sets aside the order and allows the appeal, granting consequential benefits to the appellant in accordance with the law. The judgment clarifies the correct interpretation of the exemption notification in the context of stock transfers by a 100% EOU to its DTA unit, ensuring adherence to legal provisions and precedents in determining the eligibility for exemption from SAD.
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