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2020 (12) TMI 805 - CESTAT KOLKATAEligibility of SAD exemption - “Blanks” cleared from the “SEZ Unit” of the Appellant by way of stock transfers to its “DTA Unit” - benefit of Notification No.45/2005 as amended - time limitation - HELD THAT:- The Notification exempts all goods “cleared from a SEZ” and “brought to any other place in India”. The nature of clearance, whether by way of sale or otherwise, is not qualified in any manner in the body of the Notification. The proviso which embodies the condition/test governing the exemption gets attracted only if the goods which are the subject matter of clearance, when sold in the DTA, are exempted from the payment of Sales Tax/VAT - In the instant case, it is undisputed that the clearance of blanks to the “DTA” is not by way of sale and that the underlying goods are not exempted by the State Government from the levy of VAT. The adjudicating Authority has himself accepted that such blanks attract VAT @ 5% as Ball Pen parts and the same is also evident from a sample Tax Invoice dated 20 April 2014 enclosed as part of the Appeal Paper Book. Therefore, the proviso is not attracted at all. There is no exemption from VAT/Sales Tax but just a deferral of the VAT/Sales Tax liability until the sale takes place. We are in complete agreement with the contention of the Appellant that the Circular cannot curtail the scope of an exemption notification which deserves to be interpreted strictly and on its own terms as held by the Hon‟ble Supreme Court in the Tata Tele Services case [2005 (12) TMI 96 - SUPREME COURT]. The impugned Order in the garb of recovering “SAD” also seeks to recover the CVD of ₹ 1,99,17,645/- by relying upon the proviso to Section 5A of the Central Excise Act and to that extent does travel beyond the scope of the Notice dated 3 October 2016 - In the present case, the impugned order itself records at para 12.11 that the subject goods as “ball pen parts” were generally exempted from central excise duty under S. No. 325(ii) of Notification No.12/2012 dated 17 March 2012. Even on the point of limitation the demand has to fail as the BOE‟s were countersigned by the customs official prior to clearance of goods from the Falta, SEZ. Therefore, the department was aware that the goods were cleared by way of stock transfers not attracting any VAT/Sales Tax. The Notice was issued only after the expiry of the normal period of limitation of 1 year and could not revive the demand, which had got time barred. The decision of the Tribunal in Baccarose Perfumes and Aveco Technologies case [2018 (2) TMI 1269 - CESTAT HYDERABAD] fully supports the case of the Appellant. Time Limitation - HELD THAT:- The bills of entry were filed and assessed by customs officers in charge of the SEZ; the issue involves interpretation of a notification; therefore, we find that no suppression and wilful misstatement etc with intent to evade payment of duty can be alleged and extended period cannot be invoked. In the instance case, the imports being undertaken for the period April-December 2014, normal period, as per the provision of law existing on that day, ends in October, 2015. Therefore, the issue is beyond normal period by the time the amendment came in to force - the department cannot issue Show cause notices for the normal period, of two years also, in the instant case. The appeal is allowed on merits and limitation.
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