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TMI Blog2024 (8) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... /S MICRO INKS VERSUS CCE. ST. DAMAN [ 2014 (2) TMI 207 - CESTAT AHMEDABAD] , on the identical issue, it has been settled that in respect of transfer of goods from EOU to other unit of appellant no SAD payment is required. Since, the payment of SAD itself was not required to be made, there is no question of any suppression or willful misstatement, etc. involved in the transaction. Moreover, the transaction is of transfer from one unit to another unit of the same entity, therefore, this is a clear case of Revenue neutrality, for this reason also suppression of fact or willful misstatement, etc. cannot be alleged. Since, no suppression of fact, willful misstatement, etc. elements are involved in the present case, Rule 9 1(b) cannot be invoked. Accordingly, the appellant s availment of Cenvat Credit on supplementary invoice is absolutely legal and correct. The impugned order is set aside. Appeals are allowed. - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. RAJU Shri Amal Dave Shri Parth Rachchh , Advocate for the Appellant Shri Rajesh R Kurup , Superintendent ( AR ) for the Respondent ORDER RAMESH NAIR The appellant is engaged in the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the transaction is not in the nature of sale but the stock transfer, this has been settled in the following judgments:- Skipperseil Limited (Unit-II) V/s. CCE, Alwar- 2022(10) TMI 425-CESTAT New Delhi CCE Jaipur V/s. Autolite India Ltd.-2017(2) TMI 1490-CESTAT New Delhi TFL Quinn India P.Ltd. V/s. CCE ST, Hyderabad-IV-2018(9) TMI 732-CESTAT Hyderabad STI Industries V/s. CCE, Daman-2015(327) ELT 514 (Tri.-Ahmd.) Micro Inks V/s. CCE ST, Daman-2014(303) ELT 99 (Tri.-Ahmd.) VVF Ltd., V/s. CCE, Belapur-2015(315) ELT 303 (Tri.-Mumbai) VVF Ltd., V/s. CCE, Belapur-2014(312) ELT 116 (Tri.-Mumbai) Mahindra Mahindra Ltd. V/s. CCE, Mumbai- 2019(368) ELT 105 (Tri.-Mumbai) M/s. John Energy Ltd. Final Order No. A/12620/2018 dated 26.11.2018 passed by the CESTAT, Ahmedabad. M/s.Murugappa Morgan Thermal Ceramics Ltd. Final Order No. A/11638/2019 dated 21.08.2019 passed by the CESTAT, Ahmedabad. M/s. Marck Bioscience Ltd. Final Order No. /11070/2019 dated 04.07.2019 passed by the CESTAT, Ahmedabad. 2.1 He submits that even though the appellant s sister unit got their case settled under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 but for denying the Cenvat credit, it is to be established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as this where the goods are transferred to the appellant s own units they are removed from the factory and, therefore, the Central Excise duty is payable. However, since there is no sale at that stage VAT is not payable. Subsequently, when the goods are sold by the DTA unit of the appellant VAT becomes payable. What is important for the Notification No. 23/2003 to be applicable is that VAT should not be exempted on those goods. Undisputedly, there was no exemption from VAT in this case. The mere fact that the payment of VAT does not happen concomitantly with the clearance of the goods does not mean that the VAT is exempted. This issue was discussed at length by the Bench of this Tribunal in the case of Micro Inks and paragraph 10 is reproduced below: 10. We are unable to accept the contentions raised by the ld. Departmental Representative and the findings recorded by the adjudicating authority for more than one reason. Firstly, it is the fact that the inter unit clearance from EOU to DTA are not exempted from payment of sales tax by the State Government by any notification and revenue unable to bring on record any notifications issued by the State Government or otherwise to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 emphasis 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 sales from their unit located in the notified backward area, as has been specified in the order of exemption granted to them by the State Government of U.P. It would be not out of place to note that the State Government of U.P. had specifically granted exemption from leviable of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 inasmuch 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 nobody s 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 addressed is whether the goods cleared into DTA to appellants sister units are exempted or not exempted, which in our considered view due to foregoing reasons, has to be held in favour of assessee, in the absence of any evidence on record to show that the said products if cleared to DTA is exempt from payment of sales tax. It is to be noted that provisions of Central Sales Tax, 1956 recommends movements of goods inter State by raising stock transfer notes even to independent buyers/own units by non-payment of CST/VAT on such clearances, cannot be construed as an exemption granted by the State Government. We find that for the purpose of taking benefit of Notification 23/2003-C.E., as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Inks (supra). 7. In view of the facts and circumstances of the case and the judicial pronouncement on the issue, we hold that the credit taken by the respondent is correct and legal and does not require any interference. The Revenue s appeal is rejected. 4.3 In the case of TFL Quinn India P Ltd (Supra) Hon ble Hydrabad Tribunal considering the decision of VVF Ltd. and passed following order:- 1. This appeal is directed against Order-in-Appeal No.04/2010 dated 20.01.2010 2. Heard both sides and perused the records. On perusal of records, we find that both the lower authorities have confirmed the demand of duty on the appellant on the ground that they have not discharged SAD on the goods cleared by them from EOU to DTA. It is the case of the appellant that if the clearances are made to independent buyers or purchasers, SAD is paid but while stock transferring goods from EOU to their own unit in DTA, they have not considered SAD value for discharging appropriate duty. 3. We find that the issue for determination is whether goods cleared from EOU to DTA on inter unit transfer basis would attract SAD or not. Identical issue has been decided by the Tribunal in the case of Micro Inks [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g under normal period of limitation is sustainable, we hold it so. Since the most of the demand is set aside, having held that there was no intention to evade duty, we find that penalties imposed are unwarranted and they are set aside. In view of our above observation and findings we dismiss the appeal filed by the revenue and allow the appeal filed by M/s. STI to the extent that the demands of CVD raised by invoking extended period of limitation are not sustainable and only the demand of CVD under normal period would survive. We also set aside the penalty imposed under Section 11AC. 12. Both the Appeals are disposed off in above terms and cross-objections filed by assessee also stand disposed of. 4.5 In the case of Micro inks (Supra) this Tribunal dealing with the identical issue passed the following order:- 7. At the outset, it is to be recorded that the facts are not much in dispute inasmuch as the entire duty liability as has been confirmed is only in respect of clearances made by the appellant (100% EOU) to their sister concern in DTA. It is also undisputed that the goods which are cleared from EOU, independent buyers in DTA sales tax/VAT is levied as per the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trued as an exemption granted. This is totally a wrong perception of the law inasmuch 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 nobody s 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 addressed is whether the goods cleared into DTA to appellants sister units are exempted or not exempted, which in our considered view due to foregoing reasons, has to be held in favour of assessee, in the absence of any evidence on record to show that the said products if cleared to DTA is exempt from payment of sales tax. It is to be noted that provisions of Central Sales Tax, 1956 recommends movements of goods inter State by raising stock transfer notes even to independent buyers/own units by non-payment of CST/VAT on such clearances, cannot be construed as an exemption granted by the State Government. We find that for the purpose of taking benefit of Notification 23/2003-C.E., as amended, the one and only condition specified in respect of the goods being cleared into DTA, is if the said goods are e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny 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 assessee on merits as well as in limitations, we are not recording any finding on various other submissions made by both sides. 14. The impugned orders are set aside and all the appeals allowed with consequential relief, if any. 4.7 In the cases of VVF Ltd (Supra) the Hon ble Mumbai Tribunal has taken the following view:- 4. The learned Counsel argued that they fulfil the conditions of Notification 23/2003 as the goods are otherwise not exempt from sales tax by the State Government as such and for this reason they availed exemption from SAD in the case of stock transfer to their own units. For this very reason, in respect of clearances made to other DTA units while availing exemption from SAD they had paid sales tax. The appellant also dispute the amount of duty saying that department had incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority. The duty paid by the appellant is Central Excise duty under Section 3 of the Central Excise Act and not the Customs duties. Section 3 merely provides that the Central Excise duty payable would be aggregate of Customs duty. Therefore, the appellants have correctly utilized the CENVAT credit in respect of cess of excisable goods towards payment of duty/cess leviable under Section 3 ibid. 7.3 Revenue filed a miscellaneous application to draw our attention to Board Circular No. 44/2013-Cus., dated 30-12-2013 in respect of SAD payable on goods cleared from SEZ to DTA under Notification 45/2005, dated 16-5-2005. We have discussed this matter above and given our considered view that benefit of Notification 23/2003 is admissible. Therefore, the miscellaneous application is disposed of in the above terms. 7.3 We note that in the appellant s own case, an identical issue for different time period, has been decided in their favour by the Coordinate Bench vide Order Nos. A/882-883/2013/EB/C-II, dated 18-10-2013 [2014 (312) E.L.T. 116 (Tri. - Mumbai)]. 8. In view of the above, we set aside the Order-in-Original and allow the appeal with consequential relief, if any. From the above va ..... 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