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M/s Behr India Ltd. Versus Commissioner of Central Excise, Pune

2016 (6) TMI 315 - CESTAT MUMBAI

Demand of SAD alongwith interest and penalty - 100% EOU - stock transfer made to their own DTA unit - Eligibility for availment of exemption - Notification No. 23/2003-CE dated 31.3.2003 - Held that:- the goods cleared by the appellant to their own unit is on stock transfer basis, the same goods cleared to any other DTA unit for the sale is on payment of the appropriate Sales Tax on the clearances made; there is no exemption granted by the Sales Tax authorities on the said goods. An identical is .....

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S.V. Nair, Supdt. (AR) ORDER Per M.V. Ravindran This appeal is directed against Order-in-Appeal No. P-III/237/ 2005 dated 25.7.2005 passed by the Commissioner of Central Excise (Appeals), Pune-III. 2. Heard both sides and perused the records. 3. The issue involved in this case is the appellant herein is a 100% Export Oriented Unit (EOU) manufacturing Heat Exchangers such as Evaporators, Condensers and parts thereof. The appellant claimed exemption under Notification No. 23/2003-CE dated 31.3.20 .....

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view and confirmed the demand raised along with interest and imposed penalty. On an appeal, the first appellate authority concurred with the view of the adjudicating authority. 4. Learned Counsel, after taking us through the entire records, submits that both the lower authorities have presumed that the stock transferred goods to their unit is an exemption granted from Sales Tax as the appellants have not paid the Sales Tax on such clearances. It is her submission that the issue is no more res i .....

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They are not eligible to avail the said benefit as the clearances is made to their unit as stock transfer and having not discharged the Sales Tax liability, which amounts to exempted granted to them and availed by them. He would rely upon judgment of the Tribunal in the case of Johan Deere (I) Pvt. Ltd. 2014 (311) ELT 189 (Tri-Mum). 6. On consideration of the submissions made by both sides and perusal of the records, we find that the issue involved in this case is regarding the eligibility to a .....

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e said goods. 6.2 On this factual matrix, we find that the learned Counsel is correct in bringing to our notice that an identical issue has been decided by this Tribunal in the case of Micro Inks (supra); the facts in Micro Inks are identical. The Bench after considering the submissions made by both sides has elaborately discussed the issue which is in paragraphs 7 to 10, which we reproduce: - 7. At the outset, it is to be recorded that the facts are not much in dispute in as much as the entire .....

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by both sides regarding the interpretation of benefits of Notification No. 23/2003-cus as amended from time to time filtering out, shorn unnecessary details, the said Notification extends exemption from payment of SAD only if the products which are cleared from EOU to DTA, are cleared on payment of applicable sales tax or VAT. 9. The adjudicating authority in the case in hand has held that the clearance effected by the appellant herein to their own sister concern being stock transfer, has not pa .....

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ative and the findings recorded by the adjudicating authority for more than one reason. Firstly, it is the fact that the inter unit clearance from EOU to DTA are not exempted from payment of sales tax by the state government by any notification and revenue unable to bring on record any notifications issued by the state government or otherwise to indicate that inter unit transfers from EOU to DTA are exempted. It is an admitted fact that whenever there is an inter unit transfer, it is not sales t .....

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uyers. Secondly, we find that the lower authority seems to have been guided by the argument that inter unit clearance are not taxed by the state government and is to be construed as an exemption granted. This is totally a wrong perception of the law in as much as that exemption if any, under statute needs to be granted in accordance with law ie ., by issuance of notification by the concerned authorities. It is no body's case that the state government has no power to exempt sales tax/VAT on s .....

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sing stock transfer notes even to independent buyers/own units by non-payment of CST/VST on such clearances, cannot be construed as an exemption granted by the state government. We find that for the purpose of taking benefit of Notification 23/2003/CE, as amended, the one and only condition specified in respect of the goods being cleared into DTA, is if the said goods are exempted by the state government from payment of sales tax/VAT; in the present case there is no such notification or order is .....

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e on the decision of the larger Bench in the case of Moser Baer (I) Ltd (Supra). In our view, the reliance on the ratio seems to be erroneous since the question which was raised before the larger bench was not the question that is before the bench in the proceedings in these appeals. The larger Bench was specifically referring to the issue which was in respect of a 100% EOU availing sales tax exemption, for determining the Excise duty payable on aggregate value of customs duty by inclusion of SA .....

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