9911796707
TMI Blog2014 (2) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the Development Commissioner KSEZ. The appellant discharged appropriate duty liability on the clearances made to DTA including 4% additional customs duty (hereinafter referred to as SAD) (equivalent to local sales tax/VAT) wherever applicable. The appellant while clearing the goods in DTA to its own unit under stock transfer, has not paid any sales tax nor special additional duty. Audit party took an objection to non-payment of SAD on the ground that clearance made to their sister concern would fall under the category of 'exempted from payment of sales tax' hence they are liable to pay SAD. The appellant contested objection of that the audit party, on the ground that non-payment of sales tax will not render the products cleared to DTA has exempted from Sale Tax. Various show cause notices were issued to the appellant, asking them show cause as to why the amounts of Special Additional Duty be not recovered from them alongwith interest, and why penalties be not imposed on them. The appellant contested the issue on merits as well as on limitations. The adjudicating authority after following due process of law did not agree with the appellant's contention and confirmed the deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tobacco Co of India Ltd., MANU/SC/0377/1972-AIR 1972 SC 2563, the apex court has held that 'levy' in the provisions means need not be actual collection of the same amount. It is his submission that the ratio of the apex court is clearly applicable for interpreting the conditions in the exemption notification, as claimed by them. It is his submission that the finished good which are cleared from the EOU unit to their own DTA units by way of transfer were exempted from sales tax. Therefore, the adjudicating authority could not have denied the exemption by making the case that transfer of goods is exempted from sale tax. It is his submission that when the same goods are cleared to independent buyers or 3rd parties, the goods are treated as VAT/sales tax paid goods; and the self same goods cannot not be considered as exempted goods by a process of interpretation of condition of the exemption Notification. He would rely upon the decision of apex court in the case of Hansraj Gordhandas vs. Dave -1978 (2) ELT (J 350)(S.C.) for the proposition that Notification has to be interpreted in the light of the words employed by it and not on any other basis. He would submit that the appellant auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other charges, for the time being in force, which would be leviable on an article if sold, purchased or transported in India. It is his submission that SAD has been prescribed on all goods imported into India. He would also submit that while introducing the levy of SAD, the legislations intention was spelt-out by the then Finance Minister which indicated that SAD was created in order to provide level playing field to the domestic industries. It is his submission that looking at the intention of legislature to impose levy of SAD, it is to be noted that it was to counter balance the imposition of local taxes on domestically procured goods. It is his submission that even the Customs has Notification which easier SAD, if the importer submits evidence has to discharge of sales tax/VAT on the sale of imported goods. It is his submission that in view of the facts, interpretation of the conditions of Notification has to be read in conformity with the legislative intention. It his submission that non-payment of sales tax by the appellant for the clearance made to their sister unit is nothing but claiming exemption from sales tax. It is his submission that purposive interpretation is req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid SAD component should not be included. It is his submission that if it is held that SAD component should not be included only when sales tax is paid as corollary whenever sales tax is not paid, SAD has to included in the duty. It is his further submission that whenever an assessee is seeking exemption he must establish clearly that he is covered by such provision, is the law which has been settled by the apex court in the case of Novapan India Ltd - 1994 (73) ELT 769 (SC) and which was reaffirmed by the in the case of Hari Chand Shri Gopal - 2010 (260) ELT 3 (SC)- CCE on limitations. It is his submission from the periodical returns filed by the assessee it could not have been ascertained by the dept. whether the appellant correctly claimed the benefits of Notification No. 23/2003/cus as amended as and no such information could be gathered from the returns of appellant as well as their sister concern. It is his further submission that without prejudice to the submission made on the limitation, the undertaking given by the appellant to the development commissioner in form of B 17 bond can be invoked by the authorities and demands can be raised even for extended period. Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit transfers from EOU to DTA are exempted. It is an admitted fact that whenever there is an inter unit transfer, it is not sales transactions and hence the sales tax/CST/VAT may not get attracted does not mean ipso facto, it is an exemption granted by the state government. In the absence of any notification granting exemption for specified products by the state government from levy of sales tax on the finished goods cleared from 100% EOU, it would be incorrect to hold that the goods were exempted from sales tax, more so when the appellant has discharged the sales tax on the same products which were cleared to independent buyers. Secondly, we find that the lower authority seems to have been guided by the argument that inter unit clearance are not taxed by the state government and is to be construed as an exemption granted. This is totally a wrong perception of the law in as much as that exemption if any, under statute needs to be granted in accordance with law i.e., by issuance of notification by the concerned authorities. It is no bodys case that the state government has no power to exempt sales tax/VAT on specific products. In our view, the only question which needs to be addr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were manufactured in a notified area, hence the larger bench came to the conclusion that for discharge of excise duty, the SAD has to be included. The terms of reference to the larger bench being totally different then the facts of the issue which is raised in these appeals in our view the reliance placed the revenue on the ratio of the larger bench decision will not carry their case any further. 11. As regards the limitation issue, we have verified returns filed by the assessee to the revenue authorities. On perusal of such returns which are filed regularly by the appellant, we found that appellant has specifically stated in such returns that they are clearing goods to their sister units and claiming the benefit of exemption of SAD. It was for the lower authorities to call for any explanation from the appellant, which they have not done so, that being so ,revenue authorities cannot turn around and say that they were not informed about the clearance made by the appellant to their sister unit. 12. In view of the foregoing, on merits as well as on limitation we find that impugned orders are not sustainable. 13. Since we have disposed of all the appeals in favour of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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