2017 (1) TMI 916 - AT - Customs

Tribunal overturns authority's decision, grants relief to trader in sales tax appeal.

The Tribunal allowed the appeal, setting aside the first appellate authority's decision and providing relief to the appellant. The Tribunal found that the ... Whether appellant is eligible for exemption under N/N.34/98-Cus. dated 13.6.1998 and N/N.56/98-Cus. dated 1.8.1998 from payment of special additional duty of customs (SAD) on the goods imported for resale as such? - the imported goods of the appellant are sold by them in Daman area; they had claimed the benefit of notifications from payment of SAD. Held that: - the appellant is a trader of the goods and has registered with the sales tax authority as a trader. The said sales tax registration was valid at the time of import of the goods. We notice from the records that the appellant had produced documentary evidence of invoices in respect of sale of the imported goods to various manufacturers; to some of them the appellant charged sales tax and to some of them they cleared the goods under form ST-XI. In our considered view, the first appellate authority has totally misdirected his findings without considering all these factual position - appeal allowed - decided in favor of appellant. Issues:Whether the appellant is eligible for exemption under Notification No.34/98-Cus. dated 13.6.1998 and Notification No.56/98-Cus. dated 1.8.1998 from payment of special additional duty of customs (SAD) on the goods imported for resale as such.Analysis:The case involved a dispute regarding the eligibility of the appellant for exemption from payment of special additional duty of customs (SAD) on imported goods for resale. The appellant, a trader of goods, imported HDPE granules and claimed exemption under specific notifications. The goods were sold in Daman area, and a show cause notice was issued by the department seeking to demand SAD forgone by selling goods in an area where no tax was payable. The adjudicating authority initially dropped the proceedings based on evidence of registration with the sales tax department and payment of sales tax by the appellant. However, the first appellate authority reversed this decision, leading to the appeal.The appellant argued that Daman was not a tax-exempt area, citing evidence of payment of local sales tax and challenging the applicability of sales tax exemptions meant for manufacturers to traders. They emphasized that sales were made against form ST-XI but insisted that sales tax was indeed charged, supported by various invoices issued during the relevant period. The appellant also contended that the demand was time-barred due to the invoices being accompanied by central excise invoices, indicating payment of CVD.The departmental representative supported the findings of the first appellate authority. Upon careful consideration, the Tribunal found that the appellant, registered as a trader with the sales tax authority, had indeed sold imported goods in Daman area. The Tribunal noted the documentary evidence of sales invoices, some with sales tax charges and others cleared under form ST-XI. Criticizing the misdirection of the first appellate authority, the Tribunal concluded that the impugned order was incorrect and not in line with the law. Consequently, the Tribunal set aside the first appellate authority's decision and allowed the appeal, providing consequential relief to the appellant.In conclusion, the Tribunal's analysis focused on the factual matrix of the case, emphasizing the appellant's status as a trader, registration with the sales tax authority, and the evidence of sales tax payment. The decision highlighted the misdirection of the first appellate authority and the incorrectness of its order, ultimately leading to the appeal being allowed in favor of the appellant.