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TMI Blog2013 (6) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to discharge their duty liability in accordance with the proviso to Section 3(1) of the Central Excise Act, 1944 read with the Notification No. 23/2003-C.E., dated 1-3-2003 as amended from time to time. 3. The appellant by virtue of having set up a unit in a backward area in the State of Maharashtra, has been granted certain incentives by the State Government. Thus, under the Package Scheme of Incentives of the Government of Maharashtra, an eligibility certification was issued to the then L & T John Deere Ltd. by SICOM Ltd. on the basis of which certificate of entitlement dated 13-9-2001 was issued by Dy. Commissioner of Sales Tax, Maharashtra State granting total exemption from payment of sales tax on all the goods manufactured and sold by the unit. Later, both the Eligibility Certificate and Certificate of Entitlement were amended on 13-2-2002 and 4-4-2002 respectively when the company name was changed from L&T John Deere Ltd. to L&T John Deere Pvt. Ltd. After this there have been no further amendments to the certificates even though the unit was later converted to 100% EOU and re-named as John Deere Equipment Pvt. Ltd. and is now known as John Deere India Pvt. Ltd. (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1 of the notification in dispute reads that the goods being cleared into DTA are not exempted by the State Government from payment of sales tax or VAT. From the above, it is clear that if the following conditions are satisfied, a manufacturer owning an EOU, is entitled to claim exemption from payment of excise duty equivalent to SAD : (a) Goods are cleared to DTA from an EOU. (b) Goods being cleared are not exempt from payment of Sales Tax/Value Added Tax. (c) Such exemption, if granted, shall be an exemption granted by the concerned State Government. Thus, the tractors or parts thereof are not being exempted from payment of VAT as per the provisions of the Maharashtra Value Added Tax Act (MVAT Act), then the exemption from payment of excise duty equivalent to SAD is available and has been claimed correctly by the appellant. 8. The learned Advocate further submitted that Condition No. 1 of the Notification provides that, if such goods which are totally exempt from Sales Tax/Value Added Tax, by the respective State Government then and then only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contents of the letter read as under :- "It would be kindly noted that the fact of availing of exemption from payment of VAT liability and the fact that no duty equal to SAD is payable in view of the interpretation of Note No. 1 of the Notification, was specifically brought to the attention of the authorities." Therefore, the learned Advocate submitted that as per their letter dated 12-3-2007, the tractor as a product attracts sales tax/VAT though the appellant has been given exemption from payment of dues to its coverage under "Package Scheme of Incentive" as declared by Govt. of Maharashtra for setting industry in backward area since product as such is not exempted, SAD will be nil. Thus it was the obligation of the department to analyse the returns submitted by the appellant as a manufacturer in the prescribed Form E.R.2. From the above documents, it was clear that the department was well aware from the first day of clearance that the appellant is enjoying incentive by way of exemption from liability to pay VAT and tractors are not exempted goods and the appellant has assessed duty, payable on DTA sale based on the notification and has claimed exemption. 8.4 In support o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 2009 (240) E.L.T. 25 (T.-LB). 9.1 For limitation, he submits that the appellant knew that the benefit of notification is available only subject to the condition that it had not availed any exemption from payment of sales tax on the sales of the goods viz. Agricultural Tractors and parts thereof. Despite that the appellant have availed the benefit of the notification. This clearly shows its deliberate intention to evade payment of SAD. Therefore, as per the decision in the case of Usha Rectifier Corporation (I) Ltd. v. CCE, New Delhi - 2001 (130) E.L.T. 485. The demand can be raised based on audit objection. Therefore, he prayed that the impugned order be upheld. 10. Heard both sides and considered their submissions, written submission and case law relied on by them in detail. 11. The issue before us is that whether the appellants are entitled for the benefit of Notification No. 23/2003, dated 31-3-2003 as amended. The benefit of the said notification is available after fulfilling the condition No. 1 of the said notification. The condition No. 1 is reproduced here-in-under :- "If the goods being cleared into Domestic Tariff Area are not exempt by the State Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade to DTA within U.P. only and are paying sales tax in respect of clearance made to some of the States. In other words, part of the clearances are not suffering sales tax while rest of the clearances are subject to sales tax/VAT. The Larger Bench of the Tribunal held that in respect of a 100% EOU availing sales tax exemption for determining the excise duty payable based on aggregate value of customs duty, the element of SAD should be taken into account. Therefore, on merits the appellants are not having any case. 13.1 On limitation, we find that the appellant brought to the knowledge of the department of their clearances vide letter 12-3-2007 and the factual availment of benefit of notification was well within the knowledge of the Revenue. As the Revenue has not taken any steps for denial of exemption as per abovesaid notification in time and a show-cause notice was issued only on 16-5-2011, for demand of the period from April 2007 to 30-4-2010 is barred by limitation as held by the Tribunal in the case of KEC International Ltd. (supra) wherein the Tribunal has observed that - "when the appellant has declared the goods and their clearances mentioned in monthly ER-6 returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on merits. I also agree with him that in the facts of this case, the extended period of limitation is not available to the revenue and value has to be determined based upon cum-duty price etc. 17. However, I would like to record one more reasoning on the merits of the case. Learned Special Counsel for the revenue, apart from relying upon the Larger Bench Decision of the Tribunal in the case of Moser Baer India Ltd. v. CCE, Noida - 2009 (240) E.L.T. 25 (Tri.-LB), also relied upon the Division Bench decision in the case of American Power Conversion (I) P. Ltd. v. CCE, Bangalore - 2012 (280) E.L.T. 139 (T). The Division Bench considered the very same notification, namely Notification No. 23/2003-C.E., dated 31-3-2003 in the context of Karnataka Sales Tax Act, 1957 and held that since the appellants cleared the goods by availing the benefit of exemption from payment of SAD under Notification issued under Section 19C of the Karnataka Sales Tax Act, 1957, the appellants are not entitled for the benefit of Notification No. 23/2003-C.E. This decision of the Division Bench is also squarely applicable to the facts of the present case inasmuch as the appellant had availed the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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