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2019 (3) TMI 1839 - AT - CustomsRelief of special additional duties - clearances of various medicinal products by the respondent, from their unit in a special economic zone to their own undertaking in the domestic tariff area as stock transfer - Section 3(5) of Customs Tariff Act, 1975 - HELD THAT:- From N/N. 45/2005-Cus., dated 16th May, 2005, it is apparent that exemption will not apply only if such goods, when sold in domestic tariff area, are exempted from value added tax attendant on a specific notification providing for ‘nil’ rate of duty - In the present instance, the goods themselves are not exempt from value added tax though the internal transfer defers the tax for the moment. In other words, the payment of value added tax is merely postponed till actual transaction of sale occurs. The exclusion from value added tax is, thus, fleetingly temporary and the exemption test cannot be applied except when that transaction takes place. That which cannot be subjected to the test cannot fail the test. There is no doubt that the goods themselves are liable to value added tax. Postponement of that liability or even evasion of that liability does not derogate from taxability. As the said goods are taxable under the relevant revenue laws of the State, it is found that the appeal against the order of the first appellate authority is misdirected. Appeal dismissed.
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