9911796707
TMI Blog2008 (7) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... e purposes of concession from payment of Sales Tax/VAT; they are engaged in the manufacture of CDR, CD ROM, DVDR. DVD ROM falling under Chapter Heading 8523 of the Central Excise Tariff. (b) The appellant has been issued with an eligibility certificate on 30-7-02 for availing benefit of backward area benefit from Sales Tax/VAT. (c) The appellant sold part of their goods in DTA on payment of concessional rate of duty in terms of Notification No. 23/03-C.E., dated 31-3-03. Such goods cleared in DTA were exempt from Sales Tax. (d) Department felt that while calculating the aggregate value of Customs duty under Notification No. 23/03-C.E. read with notification No. 22/2006-C.E., dated 1-3-06 the duty (SAD) element of 4% should be included on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore, penalty imposed is not warranted. 5.1 Learned DR submits that the Central Excise duty is levied by Central legislation. Sales Tax is levied by enactment of various State legislatures. The levy of SAD on imported goods is to counter balance the sales tax leviable on like articles sold, purchased or transported into India. Such levy by the State Government, are at different rates. The law envisages the Central Government can levy at the highest of the rates subject to a ceiling of 4 %. 5.2 The backward area exemption does not imply that no levy of sales tax on such articles produced in such units. The levy of SAD depends upon prevailing sales tax levies in respect of such articles through out India and not in respect any parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to which they are permitted to sell locally and subject to the conditions specified. In view of the benefits availed by them, when the goods were cleared in the domestic market there are certain quantity restrictions and the rates of duties (i.e. measure of tax) applicable is also different from the non-EOU units and the excise duty payable is based on the Customs Tariff. The measure has been prescribed under Notification No. 23/03-C.E., dated 31-3-03. The said Notification was amended by Notification No. 22/2006 dated 1-3-06. The amended condition reads as follows: "In the said notification, in the Table, - (i) against S. No. 2, for the entry in column (4), the following entry shall be substituted, namely :- In excess of the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusion of additional customs duty leviable under Section 3(5) of the Customs Tariff Act to arrive at the aggregate duty of Customs leviable on like goods was held unjustified. 6.6 We find that the levy of SAD is not be dependent upon rate of duty applicable in respect of an individual unit; it is not dependent on the 'sales tax payable' but on the 'sales tax leviable'. It is not a case that no sales tax is leviable in respect of goods cleared by the appellant. The levy is not dependent on rates applicable in the entire territory of any particular State. It can go up to the maximum rate applicable to such articles through out India subject to a ceiling of 4%. 6.7 Measure of the tax SAD appears to be not assessee-specific. Even if the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order impugned, as extracted supra. The non levy of Additional Duty of Excise (Goods of Special Importance) Act, 1957 would not ipso facto lead to a conclusion that SAD has to be charged. (b) The assessee is admittedly not discharging Sales Tax for the reasons of being situated in an area as specified under the Sales Tax Act. The appellants has strongly contended that when there is Sales Tax, there can be no levy of SAD. The said levy was introduced w.e.f. 2-6-98 under new Section 3A of the Customs Tariff Act, 1975 and was applicable only to imports. Apart from the fact that whether sale from EOU to DTA has to be treated as import or not, we also note that the measure of said levy was equivalent to Sales Tax and when the appellant was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench for deciding the following question of law. "Whether in respect of a 100% EOU availing sales tax exemption, for determining the excise duty payable based on aggregate value of customs duty, the element of SAD should be taken into account or not?" 9. The registry is directed to place the case records before the Hon'ble President for considering constitution of the Larger Bench. 10. [Per: Archana Wadhwa, Member (J)]. - I have gone through the order proposed by the learned brother. I find that the Tribunal decision in the case of Hanil Era Textiles v. C.C.E., Belapur (to which I was one of the Members) squarely applies to the disputed issue and should have been normally followed. However, as the issue involved is of importance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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