TaxTMI 
TaxTMI 
2016 (9) TMI 568
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by availing exemption of SAD in terms of Notification No. 22/99-Cus dated 28.02.99. The appellant sold those goods to M/s. JBF Industries Ltd without payment of sales tax against form ST XI. The show cause notice was issued wherein it was contended that the imported goods are exempted wholly from the levy of SAD which are imported for sales as such other than by way of High Seas sale subject to condition that the importer files a declaration at the time of clearance of the goods stating that the imported goods are for sales purpose only and the sale of the said good will not be effected from a place located in an area where no tax is chargeable on the sale or purchase of goods. As seen from the copies of the Bills of Entry recovered from the importers a stamp was affixed on the face of the Bills of Entry stating that exemption from payment of SAD in terms of Serial No. 5 of the table annexed to the Notification No. 22/99- Cus DATED 28.02.99 has been claimed. It was also found that the import....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es the form ST XI. The buyer, M/s. JBF Industries Ltd was allowed to purchase the goods without sales tax only when the same is used in the manufacture of their final product. He submits that in the notification the exclusion from exemption is provided only if the area from where the goods sold or purchased no sales tax is chargeable, which is not the fact in the present case. He submits that in the Dadra and Nagar Haveli Sales Tax Regulation, 1978, under Section 7, it prescribed that rate of tax payable by dealer registered under the said regulation. Under regulation the goods specified in the first schedule shall be chargeable to rate of 12 paisa in the rupee. As per the entry no 7 of Notification dated 30.11.1983 issued in the 1978 Regulations, it covers 'plastic goods' therefore w.e.f. 30.11.1983 plastic goods are subjected to sales tax @ 12 %. Under Section 7(3)(II) of Regulation 1978, it provides for deduction of sales to a regi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cause notice was issued on 10/9/2003. In the Order-in-Original it was held that appellant had willfully mis-stated in the bills of entry that the goods would be sold from an area where no tax is chargeable on sale of purchase of the goods. Therefore larger period under proviso Section 28(1) can be invoked. He submits that as per submission made above the area from where imported goods were sold is the area where goods are chargeable to sales tax therefore whole basis of invoking extended period gets demolished hence the longer period is not applicable in the present case and demand is clearly time bar. He submits that since issue is of interpretation of the notification penalty is not imposable. He placed reliance on following judgments. (a) Commissioner of C. Ex. Cus & S.T. Daman Vs. N.R. Agarwal Industries.[2014(300) ELT 213(Guj)] (b) Commissioner of C. Ex. Cus & S.T. Vapi Vs. Charak Pharma P. Ltd[2012(278) ELT 319(Guj)] 4. Shri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onditions, if any, subject to which the goods are exempt either partially or wholly from the duty of customs leviable thereon which is specified in the First Schedule to the said Customs Tariff Act. TABLE S. No. Description of goods Rate of special additional duty (1) (2) (3) 1. ---- Nil 2. ---- Nil 3. ---- Nil 4. ---- Nil 5. All goods falling under the said First Schedule, which are imported for sale as such, other than by way of high seas sale and the importer at the time of importation or at the time of clearances of warehoused goods for home consumption under the provisions of section 68 of the Customs Act, 1962 (No. 52 of 1962), as the case may be, makes a specific declaration to that effect in the bill of entry in the manner specified below: Provided that the rate specified herein shall not apply if the importer sells the said imported goods from a place located in an area where no tax is chargeable on sale or purchase of goods. "Declaration I/We hereby declare that the goods of description ......... imported under Bill of Entry No. .... dated ........ are for sales purpose only. I/we also declare t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....duction in the turnover in the hands of the seller for the reason that sales tax is not chargeable on the sales which made against form ST XI. In other word if the buyer is unable to provide form ST XI, the goods are otherwise chargeable to sales tax that itself shows that in particular area of the appellant sales tax is chargeable but only by virtue of form ST XI sales tax is not chargeable. As per the sales tax provision as submitted by the ld. Counsel there is no dispute that there is no area based exemption in Dadra and Nagar Haveli. The form ST XI was issued by the buyer which is permissible only in respect of goods which are for the purpose of use in the manufacture of final product. That means if the goods is purchased for re-trading, exemption from sales tax is not available to the buyer and in such case seller has to charge sales tax unavoidably. On going through the judgment in case of G.H. Shaikh(supra), we find that in said judgment the fact that buyer is located in an area where n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eld the Revenue's contention that Silvassa is an area where no tax is chargeable on sale or purchase of goods. 11.The Notifications were issued under sub-section (1) of Section 3A of the Customs Tariff Act and their provisions should be understood in the light of provisions of the parent statutory provision viz. sub-section (1) of Section 3A ibid, which reads as below : - "SECTION 3A. Special additional duty. - (1) Any article which is imported into India shall in addition be liable to a duty (hereinafter referred to in this Section as the special additional duty), which shall be levied at a rate to be specified by the Central Government by notification in the Official Gazette, having regard to the maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India: Provided that until such rate is specified by the Central Government, the special additional duty shall be levied and collected at the rate of eight per cent. of the value of the article imported into India. Explanation - In the sub-section, the expression "maximum sale tax, local tax or any other c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....edule to the DNH Sales Tax Regulations, 1978. This is obvious from sub-section (1) of Regulation 10 of DNH Sales Tax Regulations, 1978, which says that no tax shall be payable under this Regulation on the sale of goods specified in the Second Schedule subject to the conditions and exceptions, if any, set out therein. For a registered dealer like CPFL, the charging provisions under the DNHST Regulations are Regulations 4 & 6 thereof. Regulation 4 provides that every dealer whose gross turnover exceeds the taxable quantum in the previous year shall be liable to pay tax on all sales, provided that a dealer who deals exclusively in one or more classes of goods specified in the Second Schedule shall not be liable to pay any tax under the said Regulation. Regulation 6 is another charging provision which imposes liability of tax on a dealer registered under the Central Sales Tax Act, 1956. Regulation 7(1) prescribes the rates of sales tax in respect of (a) goods specified in the First Schedule, (b) goods specified in the Third Schedule and (c) any other goods, not being goods specified in the Second Schedule. Regulation 7(3) defines the expression "taxable turnover". According to this def....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y goods which are otherwise taxable cannot be held to have the effect of rendering the goods non-taxable. We are supported on this point by the judgment of the Kerala High Court in Aluminium Industries (supra). A ld. Single Judge of the High Court considered the question whether exemption from payment of Customs duty on certain goods made the goods non-dutiable. His Lordship held : "An exemption granted under Section 25(1) of the Customs Act does not have the effect of taking the goods out of the class of dutiable goods or placing them beyond the reach of Section 12. An exemption only suspends or eclipses chargeability which can be revived the moment the exemption is withdrawn." This ruling of the ld. Single Judge was affirmed by a Division Bench of the Court vide [1999 (110) E.L.T. 474 (Ker.)]. The decision of this Tribunal in the case of G.H. Shaikh v. CCE, Pune [2003 (154) E.L.T. 540], cited by ld. Counsel, is also relevant to this context. Dealing with the entry at Sr. No. 5 of Notification 22/99-Cus., the Tribunal held thus: "It is common that exemptions have been given under the Sales Tax Act in respect of certain transactions and such exemptions for specified cases would not....