2012 (12) TMI 140

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....applicants are a 100% Export Oriented Unit and manufacturers of fatty acids, alcohol and soap noodles. The applicants were allowed to sell goods manufactured by them in domestic tariff area up to 50% of FOB value of the exports on payment of concessional duty subject to achievement of NFEP. As the applicant has achieved the NFEP, applicants are allowed to clear the goods in DTA on payment of Central Excise duty equal to customs duty leviable. As per Notification 19/2006-Cus., dated 1-3-2006, Additional duty of customs (SAD) @ 4% ad valorem to countervail sales tax i.e. VAT/local taxes and other charges leviable on sales or purchase or transportation of like goods in India when imported into India is leviable whereas as per Notification 20/2....

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.... is not payable on supply made from EOU as per Sr.No. 1 of Notification No. 23/03 and therefore the Sion unit is not entitled to the credit of SAD paid by applicants. A show-cause notice was issued proposing to deny the CENVAT credit availed by their Sion unit in respect of SAD paid by the applicant for stock transfer. After the said show-cause notice, the applicant stopped paying SAD on stock transfer to their Sion unit. In these circumstances, the demands are not sustainable as department is having inconsistent views. He further argued on merits also that as per Notification 23/2003-C.E., dated 31-3-2003, there is an exemption for DTA clearance on specified goods produced by an EOU tm the condition that if the goods being cleared in domes....