2018 (4) TMI 488 - AT - Customs

Demand of SAD - stock transfer to DTA unit - benefit of N/N. 23/2003 dated 31.03.2003 (Sl. No. 2) - Held that - the identical issue has come up before the Tribunal in the case of VVF Ltd. V, CCE 2014 (2) TMI 922 - CESTAT MUMBAI where the transfer was made from the COU unit to its another unit of the DTA by way of stock transfer and it was held that the appellant is entitled to the benefit of exemption from levy of SAD leviable under Section 3(3) of the Customs Tariff Act 1975 in view of the specific exemption granted under N/N. 23/2003-CE, as amended - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Notification No. 23/2003 regarding concessional rate of duty under Special Additional Duty of Customs (SAD)
2. Applicability of SAD on stock transfer to DTA unit
3. Benefit of exemption from levy of SAD under Section 3(3) of the Customs Tariff Act, 1975

Analysis:
1. The appeal was filed against Order-in-Appeal No. 98/2008 dated 22/08/2008 concerning the period of dispute from March 2006 to February 2007. The appellant, engaged in manufacturing wiring harness assembly under the EOU scheme, imported items transferred to the DTA unit claiming a concessional rate of duty under Notification No. 23/2003. The issue arose as no VAT was paid due to stock transfer, leading to a denial of exemption and a demand for SAD by the Department.

2. The Tribunal considered the case in light of a previous ruling involving VVF Ltd. v. CCE, where a similar transfer was made from one unit to another. The Tribunal distinguished the case of Moser Baer India Ltd. v. Commissioner of Central Excise, Noida, which held that for determining excise duty based on customs duty value, SAD should be considered for 100% EOU availing Sales Tax exemption. However, the Tribunal found the Moser Baer case distinguishable as the goods in question were not exempt from Sales Tax in the DTA in the present case. Consequently, the appellant was deemed entitled to exemption from SAD under Notification No. 23/2003-C.E., as amended.

3. Based on the above analysis and considering the specific exemption granted under the relevant notification, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. The decision was dictated in open court on 08/02/2018, granting the appellant the benefit of exemption from the levy of SAD under Section 3(3) of the Customs Tariff Act, 1975.