TMI Blog2016 (9) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... e on sale and purchase of goods - Even though the sales tax was not charged from area from where the goods sold, such area shall not become non taxable territory to apply the proviso of Sr. 5 of the Notification No. 22/99-Cus - appellant entitled to claim exemption under notification no. 22/99-Cus - appeal allowed - decided in favor of appellant. - C/985/04 - A/88805/16/CB - Dated:- 26-7-2016 - Mr Ramesh Nair, Member(Judicial) and Mr. Raju, Member (Technical) Shri. Gajendra Jain, Advocate with Shri. Narendra Dave, C.A. for the Appellants Shri. D.K. Sinha, Asstt. Commissioner(A.R.) for the Respondent ORDER This appeal is directed against Order-in-Original No. 23/2004/CAC/CC I/A.H dated 11/3/2004 passed by the Commissioner of Customs(Import), Mumbai whereby demand of SAD of Custom amounting to ₹ 21,66,202/- was confirmed under Section 28(1) of the Customs Act, 1962, demanded interest under Section 28AB of the Customs Act, 1962 and also imposed penalty of ₹ 15,00,000/- in terms of Section 112(a) of the Customs Act, 1962. 2. The fact of the case is that appellant are engaged in the trading of imported Polyester Filament Yarn and Polyest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 3A of Customs Tariff Act. Under Section 3A exemption Notification No. 22/99-Cus dated 28.2.1999 was issued according to which in Sr. No. 5 of table annexed to the notification, the exemption from SAD is not available, if the importer sales the imported goods from a place located in an area where no tax is chargeable on sale or purchase of the goods. He submits that in their case they sold the goods from Silvassa area which is not a non taxable or exempted territory from payment of Sales Tax. The appellant sold the goods to M/s. JBF Industries Ltd against form ST XI issued by buyer. This itself shows that there is no exemption in particular area but exemption is only available if the buyer provides the form ST XI. The buyer, M/s. JBF Industries Ltd was allowed to purchase the goods without sales tax only when the same is used in the manufacture of their final product. He submits that in the notification the exclusion from exemption is provided only if the area from where the goods sold or purchased no sales tax is chargeable, which is not the fact in the present case. He submits that in the Dadra and Nagar Haveli Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri. Del.)] He further submits that demand is barred by limitation for the reason that the import was made in 1999 whereas the show cause notice was issued on 10/9/2003. In the Order-in-Original it was held that appellant had willfully mis-stated in the bills of entry that the goods would be sold from an area where no tax is chargeable on sale of purchase of the goods. Therefore larger period under proviso Section 28(1) can be invoked. He submits that as per submission made above the area from where imported goods were sold is the area where goods are chargeable to sales tax therefore whole basis of invoking extended period gets demolished hence the longer period is not applicable in the present case and demand is clearly time bar. He submits that since issue is of interpretation of the notification penalty is not imposable. He placed reliance on following judgments. (a) Commissioner of C. Ex. Cus S.T. Daman Vs. N.R. Agarwal Industries.[2014(300) ELT 213(Guj)] (b) Commissioner of C. Ex. Cus S.T. Vapi Vs. Charak Pharma P. Ltd[2012(278) ELT 319(Guj)] 4. Shri. D.K. Sinha, Asstt. Commissioner(A.R.) appearing on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial additional duty (1) (2) (3) 1. ---- Nil 2. ---- Nil 3. ---- Nil 4. ---- Nil 5. All goods falling under the said First Schedule, which are imported for sale as such, other than by way of high seas sale and the importer at the time of importation or at the time of clearances of warehoused goods for home consumption under the provisions of section 68 of the Customs Act, 1962 (No. 52 of 1962), as the case may be, makes a specific declaration to that effect in the bill of entry in the manner specified below: Provided that the rate specified herein shall not apply if the importer sells the said imported goods from a place located in an area where no tax is chargeable on sale or purchase of goods. Declaration I/We hereby declare that the goods of description ......... imported under Bill of Entry No. .... dated ........ are for sales purpose only. I/we also declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales tax that itself shows that in particular area of the appellant sales tax is chargeable but only by virtue of form ST XI sales tax is not chargeable. As per the sales tax provision as submitted by the ld. Counsel there is no dispute that there is no area based exemption in Dadra and Nagar Haveli. The form ST XI was issued by the buyer which is permissible only in respect of goods which are for the purpose of use in the manufacture of final product. That means if the goods is purchased for re-trading, exemption from sales tax is not available to the buyer and in such case seller has to charge sales tax unavoidably. On going through the judgment in case of G.H. Shaikh(supra), we find that in said judgment the fact that buyer is located in an area where no tax is chargeable on sale or purchase of the goods, however as regard the area of the sale there is no such exemption available. The revenue demanded Special Additional Duty on the ground that goods were sold without charging sales tax. The division bench of this Tribunal held as under: 8 We have perused the records and have . considered the submission made by both the sides. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion as the special additional duty), which shall be levied at a rate to be specified by the Central Government by notification in the Official Gazette, having regard to the maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India: Provided that until such rate is specified by the Central Government, the special additional duty shall be levied and collected at the rate of eight per cent. of the value of the article imported into India. Explanation - In the sub-section, the expression maximum sale tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India means the maximum sales tax, local tax, other charges for the time being in force, which shall be leviable on a like article, if sold or purchased in India or if a like article is not so sold or purchased which shall be leviable on the class of description of articles to which the imported article belongs. (Emphasis supplied) Either of the two Notifications reads as below :- In exercise of the powers conferred by sub-section (1) of Section 3A of the Customs Tariff Act, 1975 (51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a dealer who deals exclusively in one or more classes of goods specified in the Second Schedule shall not be liable to pay any tax under the said Regulation. Regulation 6 is another charging provision which imposes liability of tax on a dealer registered under the Central Sales Tax Act, 1956. Regulation 7(1) prescribes the rates of sales tax in respect of (a) goods specified in the First Schedule, (b) goods specified in the Third Schedule and (c) any other goods, not being goods specified in the Second Schedule. Regulation 7(3) defines the expression taxable turnover . According to this definition, taxable turnover during any period shall not include the turnover, during that period, of sales (not being the sales of goods which are specified by the Administrator under Regulation 8 as goods taxable at a particular point of sale), to a registered dealer, of taxable goods of the class or classes specified in the certificate of registration of such dealer, as being intended for use by him within Dadra Nagar Haveli as raw material for manufacture of taxable goods for sale within Dadra Nagar Haveli. The first proviso to Regulation 7(3) stipulates that the above deduction shall no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or eclipses chargeability which can be revived the moment the exemption is withdrawn. This ruling of the ld. Single Judge was affirmed by a Division Bench of the Court vide [1999 (110) E.L.T. 474 (Ker.)]. The decision of this Tribunal in the case of G.H. Shaikh v. CCE, Pune [2003 (154) E.L.T. 540], cited by ld. Counsel, is also relevant to this context. Dealing with the entry at Sr. No. 5 of Notification 22/99-Cus., the Tribunal held thus: It is common that exemptions have been given under the Sales Tax Act in respect of certain transactions and such exemptions for specified cases would not make the place, an area where no duty is chargeable on sale and purchase of goods. 12 .Following the above judicial authorities, we hold that the goods in question, sold by CPFL to JPFL during the period of dispute are to be treated as chargeable to tax for the purpose of the entries at Sr. Nos. 12 and 5 under Notification Nos. 56/98-Cus. and 22/99-Cus. respectively. Consequently, the provisos to the said entries are not applicable to the subject goods and the goods are eligible for the benefit of Nil rate of duty in terms of the said entries. The demand of SAD raised in the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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