2024 (2) TMI 496

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....ble to pay special additional duty in case of DTA clearance from their 100% EOU when the goods were cleared as a stock transfer to their own unit. The case of the department is that since the appellant have cleared their goods to their own unit, they have not paid the VAT/Sales Tax which was construed by the department as exempted from VAT/Sales Tax. Hence, appellant is not entitled for the exemption Notification No. 23/2003-CE dated 31.03.2003 (Sr. No. 1) which prescribe that if the goods is cleared into the domestic tariff area are not exempted by the State Government from payment of VAT/Sales Tax. The contention of the department is that since the appellant have not paid the VAT/Sales Tax on the domestic clearance to their own unit, the ....

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....orized Representative) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that for whatever reason if on the clearance of the goods by 100% EOU in DTA was not attracted VAT/Sales Tax, therefore, the nature of the transaction amounts to exempted and consequently the Notification No. 23/2003 is not applicable. 4. We have carefully considered the submissions made by both the sides and perused the records. 5. In the present case, the fact is not under dispute that the transaction of the goods from EOU is not a sale and it is only stock transfer, therefore, there is no VAT/ Sales tax applicable. The department considered this as exempted from Sales tax/ VAT which is not correct as a stock transfe....

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....d that the clearance effected by the appellant herein to their own sister concern being stock transfer, has not passed the test of discharge of sales tax/VAT hence the appellant is required to pay SAD at the applicable rate on such clearances. The reasoning adopted by the adjudicating authority that as stated by the dept. representative, is that the notification specifically talks about the exemption of sales tax, which would mean that sales tax or stock transfer made from EOU to their sister concern needs to be discharged. 10. We are unable to accept the contentions raised by the ld. Departmental Representative and the findings recorded by the adjudicating authority for more than one reason. Firstly, it is the fact that the inter ....

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....ter units are exempted or not exempted, which in our considered view due to foregoing reasons, has to be held in favour of assessee, in the absence of any evidence on record to show that the said products if cleared to DTA is exempt from payment of sales tax. It is to be noted that provisions of Central Sales Tax, 1956 recommends movements of goods inter State by raising stock transfer notes even to independent buyers/own units by non-payment of CST/VAT on such clearances, cannot be construed as an exemption granted by the State Government. We find that for the purpose of taking benefit of Notification 23/2003-C.E., as amended, the one and only condition specified in respect of the goods being cleared into DTA, is if the said goods are exem....

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....tate Government of U.P. had specifically granted exemption from leviable of sales tax on the goods which were manufactured in a notified area, hence the Larger Bench came to the conclusion that for discharge of excise duty, the SAD has to be included. The terms of reference to the Larger Bench being totally different than the facts of the issue which is raised in these appeals; in our view the reliance placed by the Revenue on the ratio of the Larger Bench decision will not carry their case any further. 11. As regards the limitation issue, we have verified returns filed by the assessee to the revenue authorities. On perusal of such returns which are filed regularly by the appellant, we found that appellant has specifically stated i....