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TMI Blog2018 (5) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... intention behind the exemption from SAD given to traders is that since the goods are subject to sales tax at the time of sales of such goods, goods shall be subjected to double taxation unless exempted from SAD. That as the case are not subjected to sales tax, the exemption from SAD has been wrongly availed. It was thus proposed to demand SAD along with interest and penalty. Penalty was also proposed against Shri Pawan K. Chaturvedi, Authorised Signatory and Shri Harish Bulchandani, Director of appellant-assessee concern. The demand was confirmed as proposed and penalties were also imposed against all above persons. Hence the present appeals by the appellant-assessees. 2. Revenue also filed appeal against the common impugned order for enhancement of the penalty imposed on the appellant-assessee under Section 114A of the Customs Act, 1962. 3. Shri Prasad Paranjape, ld. Counsel appearing for the appellant-assessees submits that the notification has been wrongly interpreted. The exemption is not available "If the area from where the goods are sold is a tax free zone" i.e where there is no tax on sales or purchase of goods whatsoever - then the benefit of notifications would not be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a specific benefit clause, again the special benefit would be because of buyers being in that area only and therefore emphasis in the notification condition is given to the word 'area'. Importer had sold goods without payment of sales tax from the area where no tax was chargeable on such type of sales of goods and has violated the notifications. He relies upon the Larger Bench judgment in case of Moser Baer India Ltd. 2009 (240) ELT 25 (TRI - LB) to submit that clearance on which sales tax is exempted, SAD component should be included while determining duty in terms of Notification No. 20/2003 - CE dt. 31.03.2013 as amended. There is no concept of 'Tax free zone' as the appellant-assessee has claimed, the meaning of area used in notifications. Whatever benefits of sales tax act is because of location of the place of sale in the concerned state/ UT only and therefore, the area has got much relevance in this case. That the demand is not barred by the limitation as the Appellant-assessee has given wrong declaration/ undertakings at the time of imports that the goods shall not be sold from the area where no sales tax is chargeable. That the Appellant-assessee has given declaration with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of 1975), the Central Government having regard to the maximum sales tax, local tax or any other charges for the time being leviable on the like goods in their sale or purchase in India, hereby specifies the rates of special additional duty as indicated in column (3) in the Table below in respect of goods, when imported into India, describe in corresponding entry in column (2) of the said Table and falling within the First Schedule to the said Customs Tariff Act :" (Emphasis supplied). It is clear from Section 3A(1) ibid and the Notification that (i) the speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ". 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 not be allowed unless the dealer, who sells the goods, furnishes in the prescribed manner a declaration duly filled up and signed by the registered dealer, to whom the goods are sold, in such form and containing such particulars as may be prescribed. The prescribed form for this declaration is ST-XI. In the instant case, it is not in dispute that the JPFL who purchased the goods in question from CPFL used the goods as raw material for manufacture of taxable goods viz. finished products of photographic films & papers. Further, it appears from the assessment order that, in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified 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 impugned order is, therefore, unsustainable. Consequently, the confiscation of the goods and imposition of penalties on CPFL and JPFL are also liable to be set aside." 6. The above decision of the Tribunal was based upon the earlier Tribunal's order in case of G.H Sheikh 2003 (154) ELT 540 (TRI) wherein it was held as under : "8. We have perused the records and have considered the submission made by both the sides. A mere perusal of Sl. No. 5 to Notification No. 22 of 1999 makes it clear that the proviso to Sl. No. 5 relates to a place from where sales takes place and not pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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