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TMI Blog2008 (7) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Appellant. Shri Deepak Garg, DR, for the Respondent. [Order per: M. Veeraiyan, Member (T) (for the Bench)]. - This is an appeal against the order of the Commissioner No. 01/Commr/NOIDA/2008 dated 23-1-08. 2. Heard both sides. 3. The relevant facts in brief are as follows (a) The appellant is a 100% EOU having their unit in the area specified by State Government of Uttar Pradesh for the purposes of concession from payment of Sales Tax/VAT; they are engaged in the manufacture of CDR, CD ROM, DVDR. DVD ROM falling under Chapter Heading 8523 of the Central Excise Tariff. (b) The appellant has been issued with an eligibility certificate on 30-7-02 for availing benefit of backward area benefit from Sales Tax/VAT. (c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout payment of sales tax by availing the exemption under incentives for development and growth under Section 4A, 4AA, 4B became exempted from sales tax. 4.5 Duty has been confirmed in respect of interstate transfer where sales tax has been paid. The duty wrongly demanded on this count is to the tune of Rs. 7,23,176/-. 4.6 The allegation of suppression regarding non-inclusion of SAD element in the duty calculation is incorrect and therefore, penalty imposed is not warranted. 5.1 Learned DR submits that the Central Excise duty is levied by Central legislation. Sales Tax is levied by enactment of various State legislatures. The levy of SAD on imported goods is to counter balance the sales tax leviable on like articles sold, purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within or out of India. 6.3 The goods manufactured in a 100% EOU having been manufactured within the territory of India attracts Excise duty only. The 100% EOUs avail several benefits like the duty free procurement of capital goods (imported and procured from domestic sources) and duty free inputs (imported as well as procured from domestic sources). Therefore, they are primarily required to export the goods manufactured by them except to the extent to which they are permitted to sell locally and subject to the conditions specified. In view of the benefits availed by them, when the goods were cleared in the domestic market there are certain quantity restrictions and the rates of duties (i.e. measure of tax) applicable is also different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods cleared into domestic tariff area was exempt from payment of sales tax or value added tax. 6.5 The Commissioner has held that in respect of clearance made by the appellant to the domestic area, payment of sales tax is exempted in view of backward area exemption granted by the UP Government. It is not a case where the is not liable pay sales tax but it is a case where is not liable to pay in view of the exemption. Since, sales tax is exempted, the exclusion of additional customs duty leviable under Section 3(5) of the Customs Tariff Act to arrive at the aggregate duty of Customs leviable on like goods was held unjustified. 6.6 We find that the levy of SAD is not be dependent upon rate of duty applicable in respect of an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52/2003-Cus., dated 31-3-03 for imports of EOU as claimed by the assessee. The denial of consideration of benefit of Sr. No. 4 to table to Notification No. 22/99 arrived by the Commissioner is not upheld for the reason that there was no grounds arrived to deny the claim. The Commissioner is finding that the decision of Morarjee Brembana, 2003 (154) E.L.T. 500 wherein it has been held that SAD is not applicable to sales by EOU to DTA is not applicable for the reasons as arrived in the order impugned, as extracted supra. The non levy of Additional Duty of Excise (Goods of Special Importance) Act, 1957 would not ipso facto lead to a conclusion that SAD has to be charged. (b) The assessee is admittedly not discharging Sales Tax for the reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants manufacture fabric classifiable under chapter heading 5207 of the Central Excise Tariff Act, 1985 on which duty under the above mentioned Act is leviable. Therefore, we accept the appellants contention regarding non-leviabiity of Special Additional Duty on the fabrics manufacture by them." 8. Since our prima facie based on appreciating the overall facts and circumstances is at variance with the decision cited supra we feel that it would be appropriate to refer the appeal to the larger Bench for deciding the following question of law. "Whether 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 or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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