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TMI Blog2023 (11) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... llant's own case vide Misc. Order No. 411/09-EX (DB) dated 26.06.2009. 4.9 In view of the above, the impugned order of the Adjudicating Authority has no infirmity and is correct based on the law for demanding the SAD on the goods cleared from the factory in the shape of sample quoting not for sale in DTA. The clearance in the shape of "Sample" cannot be denied as clearance of goods from the factory. The contention of the appellant that the goods has been cleared in the DTA as Sample which has not been sold and Sales Tax / Vat not payable and the SAD is not leviable on the goods cleared as sample by availing of exemption from payment of Sales Tax / Vat. The SAD on the any clearance from a EOU is leviable in case where Sales Tax / Vat has not been paid either the clearance is in the shape of Sample or clearance is in the shape of Sale in DTA. 4.10 The Hon'ble CESTAT's Larger Bench vide Misc. Order No. 411/09- EX (DB) dated 26.06.2009 observed that "In respect of a 100% EOU availing sale tax exemption, for determining the excise duty payable based on aggregate value of Customs duty, the element of SAD should be taken into account." 2.1 Appellant is a 100% EOU engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve. Hence, this appeal. 3.1 The matter was listed for hearing on various dates and no one has appeared for the appellant. Hence, in terms of Rule, 20 of CESTAT Procedure Rules, 1982, this matter has been taken up for consideration and decision ex-parte after hearing the learned Authorized Representative. 3.2 Learned Authorized Representative appearing for the revenue submits that the issue involved in the present case is a very narrow compos as the same is covered under the Notification No. 23/2003-CE was amended by Notification No. 22/2006-CE by which it was provided that the SAD was to be included in the aggregate of Customs duty if the goods cleared into GTA are exempt from payment of sales tax. In the impugned Order-in-Original it has been held that the said goods on which no VAT is paid are exempt from payment of VAT, hence this value is to be included. Accordingly, he submits that impugned order may be upheld. 4.1 We have considered the impugned order along with the submissions made in the appeal and during the course of argument. 4.2 For holding against the appellant Adjudicating Authority has recorded as follows:- "13. Regarding removal against invoice No. 9922 dt. 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1AB respectively of Central Excise Act, 1944 Since they failed to assess and discharge proper Central Excise duty and suppressed this fact from the department, therefore they have rendered themselves liable for penal action under rule 25 of Central Excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944." 4.3 Sr No 2 of the exemption notification No 23/2003-CE dated 31.03.2003 as amended by Notification No 22/2006-CE dated 01.03.2006, reads as follows: "In excess of the amount equal to the aggregate of duties of Customs leviable on like goods, as if,- (a) duty of customs specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), read with any other notification in force was reduced by 75%, and (b) no additional duty of customs was leviable under sub-section (5) of the section 3 of the said Customs Tariff Act: Provided that while calculating the aggregate of customs duties, additional duty of customs leviable under sub-section (5) of the section 3 of the Customs Tariff Act shall be included if the goods cleared into Domestic Tariff Area are exempt from payment of sales tax or value added tax." Proviso to Section 3 (1) reads as follows: "P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of a 100% EOU availing sale tax exemption, for determining the excise duty payable based on aggregate value of Customs duty, the element of SAD should be taken into account." 4.4 The only dispute in the matter is with regards to interpretation of the word 'exemption'. It is settled principle in law after the decision of the Hon'ble Apex Court in the case of Dilip Kumar & Co, [2018 (361) ELT 577 (SC)] wherein following has been held: "52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled." Admittedly in the present case there is no ambiguity in the notification and the issue needs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant that as these goods were not exempt from payment of VAT and sales tax but were not taxable under VAT being samples. The wordings of proviso of the notification No No 23/2003-CE dated 31.03.2003 as amended by Notification No 22/2006-CE dated 01.03.2006 are unambiguous and they refer to exempt goods under VAT Act. In the present case the goods are not specified as exempt goods as defined under the VAT Act, but are not the part of taxable turnover. 4.5 In case of Dhiren Chemical Industries [2002 (139) E.L.T. 3 (S.C.)] a five judges bench of Hon'ble Supreme Court has held as follows: "4. In the case of Motiram Tolaram, reliance was placed upon the case of Usha Martin to contend that the appropriate duty being nil, because the raw material was not manufactured in India, it must be taken that appropriate duty has been paid and the appellants would be entitled to the benefit of the Exemption Notification in question, which used the said phrase. The Court was unable to agree. It said that the raw material being an item which was manufactured in India, a rate of excise duty was leviable thereon. On the raw material which had been imported, the appropriate amount of duty had not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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