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TMI Blog2016 (9) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... exemptions for specified cases would not make the place “an area where no duty is chargeable on sale and purchase of goods - Even though the sales tax was not charged from area from where the goods sold, such area shall not become non taxable territory to apply the proviso of Sr. 5 of the Notification No. 22/99-Cus - appellant entitled to claim exemption under notification no. 22/99-Cus - appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 22/99-Cus dated 28.2.1999 was issued according to which in Sr. No. 5 of table annexed to the notification, the exemption from SAD is not available, if the importer sales the imported goods from a place located in an area where no tax is chargeable on sale or purchase of the goods. He submits that in their case they sold the goods from Silvassa area which is not a non taxable or exempted territory from payment of Sales Tax. The appellant sold the goods to M/s. JBF Industries Ltd against form ST XI issued by buyer. This itself shows that there is no exemption in particular area but exemption is only available if the buyer provides the form ST XI. The buyer, M/s. JBF Industries Ltd was allowed to purchase the goods without sales tax only when the same is used in the manufacture of their final product. He submits that in the notification the exclusion from exemption is provided only if the area from where the goods sold or purchased no sales tax is chargeable, which is not the fact in the present case. He submits that in the Dadra and Nagar Haveli Sales Tax Regulation, 1978, under Section 7, it prescribed that rate of tax payable by dealer registered under the said regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had willfully mis-stated in the bills of entry that the goods would be sold from an area where no tax is chargeable on sale of purchase of the goods. Therefore larger period under proviso Section 28(1) can be invoked. He submits that as per submission made above the area from where imported goods were sold is the area where goods are chargeable to sales tax therefore whole basis of invoking extended period gets demolished hence the longer period is not applicable in the present case and demand is clearly time bar. He submits that since issue is of interpretation of the notification penalty is not imposable. He placed reliance on following judgments. (a) Commissioner of C. Ex. Cus & S.T. Daman Vs. N.R. Agarwal Industries.[2014(300) ELT 213(Guj)] (b) Commissioner of C. Ex. Cus & S.T. Vapi Vs. Charak Pharma P. Ltd[2012(278) ELT 319(Guj)] 4. Shri. D.K. Sinha, Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that there is no dispute that the appellant have sold the goods without charging sales tax. The condition of the notification under proviso to Sr. 5 of the table annexed to the notification No. 22/99-Cus prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Act, 1962 (No. 52 of 1962), as the case may be, makes a specific declaration to that effect in the bill of entry in the manner specified below: Provided that the rate specified herein shall not apply if the importer sells the said imported goods from a place located in an area where no tax is chargeable on sale or purchase of goods. "Declaration I/We hereby declare that the goods of description ......... imported under Bill of Entry No. .... dated ........ are for sales purpose only. I/we also declare that sale of said goods will not be effected from a place located in an area where no tax is chargeable on sale or purchase of goods. In case the said goods are disposed of in any manner in contravention of the conditions specified in notification No. 20/99-Customs, dated the 28th February, 1999, without prejudice to any other action that may be taken under any law for the time being in force, I/we undertake to pay the special additional duty of customs of Rs. ..... , which is leviable on these goods, but for exemption contained in the said notification. Sd/- (Date and stamp)" Nil From the above Sr. No. 5 of the Notification, we find that exemption is available whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgeable on sale or purchase of the goods, however as regard the area of the sale there is no such exemption available. The revenue demanded Special Additional Duty on the ground that goods were sold without charging sales tax. The division bench of this Tribunal held as under: 8 We have perused the records and have . considered the submission made by both the sides. A mere perusal of Sl. No. 5 to Notification No. 22 of 1999 makes it clear that the proviso to Sl. No. 5 relates to a place from where sales takes place and not place to which sale is made. Therefore, the finding in the impugned order is clearly contrary to the terms of the Notification. Accordingly, we are in agreement with the learned Counsel for the appellant that the duty demand has been made on erroneous understanding of the legal position. We are not able to accept the contention raised by the learned SDR as it is common that exemptions have been given under the Sales tax Act in respect of certain transactions and such exemptions for specified cases would not make the place "an area where no duty is chargeable on sale and purchase of goods". We do not find any merit in the finding of excess quantity also. The qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article is not so sold or purchased which shall be leviable on the class of description of articles to which the imported article belongs. (Emphasis supplied) Either of the two Notifications reads as below :- "In exercise of the powers conferred by sub-section (1) of Section 3A of the Customs Tariff Act, 1975 (51 of 1975), the Central Government having regard to the maximum sales tax, local tax or any other charges for the time being leviable on the like goods in their sale or purchase in India, hereby specifies the rates of special additional duty as indicated in column (3) in the Table below in respect of goods, when imported into India, describe in corresponding entry in column (2) of the said Table and falling within the First Schedule to the said Customs Tariff Act :" (Emphasis supplied). It is clear from Section 3A(1) ibid and the Notification that (i) the special additional duty of customs is a levy on imported goods to offset the burden of sales tax and other local taxes and charges borne by manufacturers who procure like goods indigenously on payment of such taxes and charges and that (ii) the rate of SAD is prescribed having regard to the maximum sales tax, local t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e class or classes specified in the certificate of registration of such dealer, as being intended for use by him within Dadra & Nagar Haveli as raw material for manufacture of taxable goods for sale within Dadra & Nagar Haveli. The first proviso to Regulation 7(3) stipulates that the above deduction shall not be allowed unless the dealer, who sells the goods, furnishes in the prescribed manner a declaration duly filled up and signed by the registered dealer, to whom the goods are sold, in such form and containing such particulars as may be prescribed. The prescribed form for this declaration is ST-XI. In the instant case, it is not in dispute that the JPFL who purchased the goods in question from CPFL used the goods as raw material for manufacture of taxable goods viz. finished products of photographic films & papers. Further, it appears from the assessment order that, in respect of those quantities of Jumbo Rolls sold by CPFL to JPFL, for which the latter issued declaration in ST-XI Form, the assessing authority has allowed deduction from gross turnover in terms of Regulation 7(3)(II)(a)(iv). In respect of a minor quantity of Jumbo Rolls sold to JPFL by CPFL, for which no such dec ..... 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