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TMI Blog2014 (2) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... llant 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 - Decided in favour of assessee. - E/328/2011-DB - ORDER No. A/10004/2014 - Dated:- 2-1-2014 - Mr. M.V. Ravindran and Mr. H.K. Thakur, JJ. For the Appellant : Shri S. Suriyanarayan (Adv.) For the Respondent : Shri S.K. Mall (AR) JUDGEMENT Per : Mr. M.V. Ravindran; All these appeals raise a common question and are filed by the same assessee hence they are being disposed of by a common order. 2. The relevant facts in brief that arises for consideration are the appellant herein is a 100% Export Oriented Unit (EOU), engaged in the manufacture of colors various types of pigments, flushes, inks, resins, varnishes and various other products. 3. The appellant has been granted permission to set up 100% Export Oriented Unit by the Development Commissioner, KSEZ, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended by Notification No.26/2005-CE. It is his submission that the appellants final products are levied SAD with effect from 1.3.2006. It is his submission that the entire issue in these appeals is from 1.3.2006 onwards. He would then take us through the notifications and more specifically condition No. 1 applicable to the exemption made in the Notification and submit that they did not pay VAT/Sales Tax on the clearance on transfer to their own sister units in DTA, does not mean that the goods which were cleared were exempted by the state government from payment of sales tax/VAT. He would submit that phraseology of the notification for enjoying exemption shows on the goods cleared in to DTA shall not be exempted from sales tax/VAT by concerned state government. It is his submission that the said the condition cannot be inferred or interpreted as the goods cleared to DTA should have suffered sales tax. It is his submission that exemption from tax cannot be interpreted as amount of actual collection of taxes. It is his submission that the appellant has claimed exemption from payment of SAD only for clearance into DTA to its own units by way of transfer. He would submit that diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission that the reliance placed by the Revenue on circular dtd 27.7.2012 is not correct and corrigendum issued subsequently also does not be help. It is his submission that when the department audit took place, first audit party did not object to the eligibility to exemption of notification, but subsequent audit of CAG has raised objections, cannot be held as an intention to evade duty and limitation point can be canvassed by the appellant. It is his submission that for this proposition reliance is placed on the judgment of the Hon ble High Court of Gujarat in the case of Darshan Boardlam Lt vs. Union of India- 2013(287)ELT 401 (Gujarat). It is also his submission that the appellant filed the returns regularly with the authorities and specified the transactions in their returns which indicated clearance of goods to their sister concern. It is his further submission that the question of revenue s neutrality that the amount paid as SAD by the appellant, the said available to its sister concern as CENVAT credit hence there would be no intention to pay any SAD on the clearance made to the sister concern. 5. Ld. Additional Commissioner (AR) on the other hand argued that the essenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation; is a proposition upheld by the apex court in the case of Martin Lottery Agencies Ltd., 2009 (14) STR 593 (SC). It is his submission that export import policy does not differentiate between clearance for sale and for sister units as is in the instant case. It is his submission that Board vide circular No. 38/2003-cus dated 6.5.2003 had specifically dealt with the issue indicating that the goods, which are allowed to be sold in Indian would mean that they are in accordance with the provisions of the export import policy. It is also his submission that the Board in its circular No. DGEP/EOU/29/2012 dated 27.7.2012, specifically clarified that in case of finished goods cleared to DTA as transfer, if exempted from payment of sales tax/VAT, SAD shall be leviable at the prescribed rate. It is also his submission that this clarification was followed by corrigendum dated 15.7.2013 making it clear that if sales tax/VAT is not levied on stock transfer; such clearance get covered under the exempted category as indicated in Notification No. 23/2003-cus as amended. He would also rely upon the decision of the larger Bench of the Tribunal in the case of Moser Baer India Ltd., - 2009 (240) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts are cleared by the appellant to independent buyers and their sister concern. 8. The entire dispute is correctly put forth by both sides regarding the interpretation of benefits of Notification No. 23/2003-cus as amended from time to time filtering out. Unnecessary details, the said Notification extends exemption from payment of SAD only if the products which are cleared from EOU to DTA, are cleared on payment of applicable sales tax or VAT. 9. The adjudicating authority in the case in hand has held that the clearance effected by the appellant herein to their own sister concern being stock transfer, has not passed the test of discharge of sales tax/VAT hence the appellant is required to pay SAD at the applicable rate on such clearances. The reasoning adopted by the adjudicating authority that as stated by the dept. representative, is that the Notification specifically talks about the exemption of sales tax, which would mean that sales tax on stock transfer made from EOU to their sister concern needs to be discharged. 10. We are unable to accept the contentions raised by the Ld. Departmental Representative and the findings recorded by the adjudicating authority for more th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification or order issued by the state government exempting impugned goods from the payment of sales tax/VAT. It is to be held that plea reading of notification No. 23/2003-CE as amended is applicable QUA-GOODS and exemption is across the Board and is applicable to all such goods which are not exempted by the state government by issue of notification or an order from payment of sales tax/CST/VAT. We also find that large emphasise placed upon, by the lower authorities as well as departmental representative on the decision of the larger Bench in the case of Moser Baer (I) Ltd (Supra). In our view, the reliance on the ratio seems to be erroneous since the question which was raised before the larger bench was not the question that is before the bench in the proceedings in these appeals. The larger Bench was specifically referring to the issue which was in respect of a 100% EOU availing sales tax exemption, for determining the Excise duty payable on aggregate value of customs duty by inclusion of SAD, whether should be taken into account or not while answering such a reference, larger bench has held that the assessee in that case was availing sales tax exemptions in respect of sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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