Appeal granted for manufacturing under EOU scheme, exemption from SAD allowed under specific conditions.

The Tribunal allowed the appeal in favor of the appellant, who was engaged in manufacturing under the EOU scheme and imported items transferred to the DTA unit. The appellant was granted exemption from the levy of SAD under Notification No. 23/2003, as the goods in question were not exempt from Sales Tax in the DTA. The impugned order was set aside, and the appellant was deemed entitled to the exemption, with the decision rendered on 08/02/2018.

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Issues:
1. Interpretation of Notification No. 23/2003 regarding concessional rate of duty under Special Additional Duty of Customs (SAD)
2. Applicability of SAD on stock transfer to DTA unit
3. Benefit of exemption from levy of SAD under Section 3(3) of the Customs Tariff Act, 1975

Analysis:
1. The appeal was filed against Order-in-Appeal No. 98/2008 dated 22/08/2008 concerning the period of dispute from March 2006 to February 2007. The appellant, engaged in manufacturing wiring harness assembly under the EOU scheme, imported items transferred to the DTA unit claiming a concessional rate of duty under Notification No. 23/2003. The issue arose as no VAT was paid due to stock transfer, leading to a denial of exemption and a demand for SAD by the Department.

2. The Tribunal considered the case in light of a previous ruling involving VVF Ltd. v. CCE, where a similar transfer was made from one unit to another. The Tribunal distinguished the case of Moser Baer India Ltd. v. Commissioner of Central Excise, Noida, which held that for determining excise duty based on customs duty value, SAD should be considered for 100% EOU availing Sales Tax exemption. However, the Tribunal found the Moser Baer case distinguishable as the goods in question were not exempt from Sales Tax in the DTA in the present case. Consequently, the appellant was deemed entitled to exemption from SAD under Notification No. 23/2003-C.E., as amended.

3. Based on the above analysis and considering the specific exemption granted under the relevant notification, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. The decision was dictated in open court on 08/02/2018, granting the appellant the benefit of exemption from the levy of SAD under Section 3(3) of the Customs Tariff Act, 1975.

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