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Issues: (i) Whether the benefit of Notification No. 45/2005-Customs dated 16.05.2005 (exemption from whole of Special Additional Duty) is available for goods cleared from FTWZ/SEZ to DTA by way of stock transfer; (ii) Whether the adjudged demand invoking the extended period of limitation is sustainable where there is no proven suppression of facts.
Analysis: The Tribunal examined prior coordinated decisions addressing the scope of Notification No. 45/2005-Customs and found that the Notification exempts goods ''cleared from a SEZ'' without qualifying the mode of clearance; the proviso applies only where the goods, when sold in the DTA, are exempted by the State Government from sales tax/VAT. The Tribunal noted consistent precedents holding that stock transfers to DTA units, where VAT liability is not extinguished by state exemption, fall within the scope of the Notification. The Tribunal further examined communications and administrative practice, including directions and minutes indicating that specified officers and FTWZ/SEZ authorities accepted the stock transfer mechanism and related certifications. On limitation, the Tribunal analysed the timing of show cause notices vis-a -vis the statutory limitation period in force for the relevant import period and the absence of any established wilful suppression or collusion by the appellants that would justify invocation of the extended period under Section 28(4) of the Customs Act, 1962. The Tribunal relied on authorities holding that when imports are assessed by SEZ/FTWZ customs officers and the issue is interpretative of a notification, extended limitation cannot be invoked in absence of suppression of facts.
Conclusion: The Tribunal concluded that the demand raised by invoking the extended period of limitation is time-barred in the absence of proven suppression of facts and, applying consistent Tribunal and Supreme Court rulings on identical facts, set aside the adjudication order confirming duties, confiscation and penalties; the appeals are allowed in favour of the appellants.
Ratio Decidendi: Where clearances from SEZ/FTWZ to DTA are by way of stock transfer and the goods are not exempted from sales tax/VAT by the State, Notification No. 45/2005-Customs covers such clearances and an extended period for demand cannot be invoked absent proven suppression or wilful misstatement.
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