Special Additional Duty exemption upheld where imported goods were sold by a registered trader with sales tax compliance, despite some Form ST-XI clearances.

Exemption from Special Additional Duty of customs could not be denied where the importer was a registered trader and the imported goods were sold as such to manufacturers, with the record showing sales tax compliance on relevant transactions. The documentary evidence, including invoices, sales tax registration and material showing tax charged on some sales, was not properly appreciated below, and the mere fact that some clearances were made against Form ST-XI did not by itself take the sales outside the taxing net. On that basis, the notification benefit was upheld and the SAD demand could not stand.

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Issues: Whether the appellant was entitled to exemption from Special Additional Duty of customs under the relevant notifications when the imported goods were sold as such in Daman and some clearances were made against Form ST-XI.

Analysis: The appellant was a registered trader at the time of import, and the record showed sale of the imported goods to various manufacturers. The evidence included invoices, sales tax registration, and material indicating that sales tax was charged on some transactions, while other clearances were made under Form ST-XI. On these facts, the authority below had proceeded on an incomplete appreciation of the record and had incorrectly treated the sales as outside the taxing net without properly considering the documentary evidence produced by the appellant.

Conclusion: The appellant was entitled to the notification benefit and the demand of Special Additional Duty could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where the importer establishes that the goods were sold as such by a registered trader and the record shows local sales tax compliance on the relevant transactions, exemption from Special Additional Duty under the governing notifications cannot be denied merely because some sales were made under Form ST-XI.

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