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TMI Blog2014 (2) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... d Penalty 23.3.2011 February, 2009 to October, 2009 Rs.4,81,41,421/- Rs.4,81,41,421/- 31.1.2012 November, 2009 to August, 2011 Rs.4,10,84,593/- Rs.40,00,000/- Being aggrieved, the appellant is in appeal before this Tribunal. 2. The brief facts of the case are that the appellant is a 100% EOU located at Taloja, Dist. Raigad, Maharashtra. The appellant are engaged in the manufacture and marketing of oleo chemicals and personal care products for domestic and international market including manufacture of distillate fatty acid, fatty alcohol, glycerin and soaps etc. The company is having several manufacturing units spread over in Maharashtra and also in other states. The appellant is registered under Central Excise and is also having permission to sell part of the goods manufactured by them in Domestic Tariff Area (DTA) on payment of Central Excise duty subject to the condition(s) specified in the Foreign Trade Policy. Section 3 of the Central Excise Act, 1944 provides that the excise duty of an amount equal to the aggregate of the duties of Customs, which is leviable under the Customs Act, 1962 or any other law for the time being in force on like goods produced or manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared into DTA under Section 3 of the Central Excise Act, 1944 and if the effective rate of SAD is NIL, then SAD will not be included in calculating the aggregate duties of Customs for purpose of levy of Central Excise duties under Section 3 of the Central Excise Act, 1944. Besides the above Notification No. 20/2006- Cus, the Central Government by Notification No. 23/2003 dated 31.03.2003, has exempted the goods manufactured and produced in an EOU and cleared to DTA from levy of SAD subject to the condition that the said goods cleared to DTA are not exempted by the State Government from payment of Sales tax/VAT. 2.1 Revenue issued show-cause notice to the appellant under the belief that non-payment of Sales Tax/VAT on stock transfer made by the appellant EOU to its other units amounts to exemption of Sales Tax/VAT. Accordingly, show-cause notices were issued as to why Central Excise duty equal to the aggregate of duty of customs under Section 3(1) of the Central Excise Act and specifically the element of Special Additional Duty (SAD) of Customs, which is a part of the composite duty in respect of clearance effected during the period as detailed in the show-cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods may belong to any chapter heading. (ii) Further, vide Notification NO.23/2003-CE dated 3.1.2003, the Central Government has exempted excisable goods (any chapter, all goods) to the First Schedule of the Central Excise Tariff Act, 1985, produced or manufactured in an EOU or an Electronic Hardware Technology Park (EHTP) unit or a Software Technology Park (STP) unit and brought to any other place in India in accordance with the provisions of Foreign Trade Policy and subject to the relevant conditions specified in the Annexure to the said notification and duty of excise leviable thereon as is equivalent to the additional duty of customs leviable on such goods under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 read with the proviso to sub-section (1) of Section 3 of the said Central Excise Act, subject to condition No. 1 if the goods being cleared into the DTA are not exempt by the State Government from payment of Sales Tax or VAT. (iii) It is further contended that undisputedly Sales Tax is leviable on the sale of goods in question when cleared to DTA (by way of sales), meaning thereby that there is no exemption from payment of Sales Tax/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) Further reliance is placed on the ruling of the Hon'ble Andhra Pradesh High Court in the case of Bharat Electronics Ltd. Vs.Dy. Commissioner (CT)-2011 (46) VST 170 (AP), wherein in para 8, the definition of "sale"under Section 2(g) of the CST Act has been noticed that "there must be a transfer of property in goods for consideration by one person to another to constitute a sale."Further, it was held that transfer of goods from one unit of the assessee to another is in the nature of stock transfer and would not, by itself and without anything more, constitute 'sale' as the petitioner company cannot be said to have sold goods to itself. (vii) Further reliance has been placed on the ruling Peekay Re-rolling Mills Vs. AC - 2007 (219) ELT 3 (SC), wherein at para 35 of its order, the Hon'ble Supreme Court have observed as follows:- "35. first aspect of the argument of the respondent is with respect to the impact of exemption upon the liability to tax. In our opinion, exemption can only operate when there has been a valid levy, for if there was no levy at all, there would be nothing to exempt." (viii) Further reliance has been placed on the ruling o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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