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2022 (10) TMI 425 - AT - Central Excise100% EOU - Levy of SAD equivalent of VAT - transfer of goods which are chargeable to VAT to its own Domestic Tariff Area Unit - does the Central Excise Duty have to be paid including Special Additional Duty (SAD) of Customs or otherwise? - HELD THAT:- The undisputed facts are that the appellant’s goods were leviable to VAT and no VAT was paid because there was no sale of the goods but only stock transfer to its DTA unit. The point of taxation in respect of Central Excise duty and VAT are different. As far as the Central Excise duty is concerned, it becomes payable when the goods are cleared from the factory whether or not there is a sale because the taxable event is manufacture itself and not sale. On the other hand, the VAT is payable only when there is a sale or purchase. The taxable event is sale or purchase. Therefore, in cases such as this where the goods are transferred to the appellant’s own units they are removed from the factory and, therefore, the Central Excise duty is payable. However, since there is no sale at that stage VAT is not payable. Subsequently, when the goods are sold by the DTA unit of the appellant VAT becomes payable. What is important for the Notification No. 23/2003 to be applicable is that VAT should not be exempted on those goods. Undisputedly, there was no exemption from VAT in this case. The mere fact that the payment of VAT does not happen concomitantly with the clearance of the goods does not mean that the VAT is exempted. The appellant is not liable to pay Central Excise duty reckoning the SAD payable on goods cleared by the appellant if they were imported into India - Appeal allowed - decided in favor of appellant.
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