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2022 (8) TMI 4 - KERALA HIGH COURTLiability of tax - movement of capital goods from the petitioner’s unit in CSEZ to the 6th respondent’s unit at Udaipur, Rajasthan - whether the theory of lease from CSEZ to 100% EOU at Udaipur, Rajasthan is made out by the petitioner? - HELD THAT:- The application refers to the transfer of machines to the 6th respondent unit definitely all details are not stated. At best it could be said that the correspondence taken up with the competent authorities under the Customs Act are bereft of details, however, the permission by accepting the request for transfer was granted on 24.05.2004. The 6th respondent is stated to be a 100% EOU. Invoices dated 15.06.2004 followed the permission dated 24.05.2004. The invoices are raised in favour of the 6th respondent. The alleged lease under which the capital goods are moved from Cochin from Udaipur, for the limited verification we can undertake, we are convinced to hold that the plea of lease arrangement under which capital goods are transferred from Cochin to Udaipur is not convincing and acceptable. Whether the EXIM policy 2002-07 permits inter-unit transfer? - HELD THAT:- On perusal of Ext.P7-permission, and Ext.P9-Bill of Entry, and by adopting the analogy or Spares Corporation case and in the peculiar circumstances of the case, it can be opined that these documents would not determine the character and incidence of tax under the CST Act, 1956. The exigibility or otherwise is under Section 3 and 5 of the CST Act, 1956. Movement of goods is in the course of import or not? - HELD THAT:- It is relevant to point out that the movement of capital goods from Cochin to Udaipur could not be under both the arrangements viz. firstly, lease in favour of the 6th respondent, secondly, transfer of goods in the course of import. The writ petitioner though has inconsistent pleas, still we would like to examine whether, from the documents now placed before the authorities and this Court, the movement of goods could be treated as in the course of import. Claim of the petitioner for exemption from payment of sales tax - HELD THAT:- The record discloses that the capital goods were kept in a bonded warehouse and moved out of the bonded warehouse of SEZ, State of Kerala, to Udaipur in Rajasthan. The 6th respondent transferee is not located or established in SEZ but 100% EOU. The movement of goods from one SEZ to another SEZ may have different connotations and in the case, on hand, since the movement is to a 100% EOU, all the inferences available in the transfer of goods from one SEZ to another SEZ are not attracted. Pursuant to the permission granted in Ext.P7, bill of entry is raised, invoices are booked and goods transported, pursuant to the permission granted by the Development Commissioner. The invoices raised describe 6th respondent as a consignee. The 6th respondent is not asserting his status in the transfer or movement of goods. To us, from the documents relied on by the petitioner, the subject movement is an inter-state transfer and attracts Central Sales Tax - the case of the petitioner for exemption from payment of central sales tax on the ground that, movement of goods is in the course of import is also unsustainable and accordingly rejected. Appeal allowed - decided in favor of appellant.
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