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TMI Blog2025 (5) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... f SAD if goods being cleared to DTA are not exempted by the state Government from payment of Sales Tax/VAT. The appellant also availed the benefit of this exemption notification did not pay SAD and on stock transfer of goods to sister units without payment of VAT/CST as for stock transfers, no sales tax was applicable Against Department's allegation of non payment of SAD on stock transfer to the sister concern units, the Appellant explained that SAD is not payable on goods sold on stock transfer basis. However, on insistence of the Department, they paid the duty under protest. Another issue is that the Appellant destroyed some goods on being found unfit for consumption but department required payment of duty on the said destroyed goods. Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r destruction of finished goods only and did not obtain any prior permission from the Central Excise/Customs Authorities. For the destruction of the raw-materials they had not obtained any permission either from FDA or Central Excise/Customs Authorities. Para 6.8 (e) & (f) of the Foreign Trade Policy 2009-14 which deals with the sale of waste/scrap/remnants arising out of production process or in connection therewith and their destruction are reproduced as under:- (e) Scrap / waste / remnants arising out of production process or in connection therewith may be sold in DTA, as per SION notified under Duty Exemption Scheme, on payment of concessional duties as applicable, within overall ceiling of 50% of FOB value of exports. Such sales of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in some specified areas can have no bearing on the rate of SAD, fixed by the Central Government by a notification issued under Section 3(5) of the Customs Tariff Act, 1975. .................................. .................................. 12. When clearances are effected from the 100% EOU, the assessment is required to be done. The rates of duty applicable and the valuation are to be determined at the time of removal. In the present case, there are cases of clearances on which sales tax leviable is exempted and there are cases where sales tax is being paid. As assessment has to be undertaken at the time of each removal, we hold that in respect of clearances on which sales tax is paid, the SAD component should not be included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods found unfit are destroyed in the factory premises. As per Para 6.8 and Para 6.15 of the relevant Foreign Trade Policy when read with chapter 18 of the Central Excise manual, same are also allowed in their own case through favourable order from CESTAT . They likewise also pleaded that no interest and penalty is imposable in the present case and the extended period of limitation is not available to the department as they have not suppressed anything. Their audit was being done on regular basis and in case of destruction, intimation was given to the department. 4.3 During the course of arguments, the Learned Counsel pleaded that no penalty be imposed. He admitted that the decision of Moser Baer India Ltd Vs. Commissioner of Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he article, even if some State Governments give exemption overall or for some area of a particular state and if that article has been fully exempted from payment of sales tax/VAT. Therefore, we conclude that on merits if supplies are made by 100%EOU to specified exempt area, even if such area is not leviable to VAT/sales tax, it would still be chargeable to 4% SAD. Even the learned counsel had fairly conceded that the decision of the Larger Bench of the Tribunal in the case of Moser Baer India Ltd (cited supra) is against them. On point of limitation, the appellant's contention that the issue finally got resolved by the decision in Moser Baer India Ltd is not acceptable as the said decision came in 2005 whereas the dispute in this case rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We also find that in 2009 (235) ELT 676 (Tri. Ahm.) in the matter of Sun pharmaceutical Ltd vs. Commissioner of Central Excise and Customs, Daman (decided by this Bench), it has been held that for expired medicines, if despite waiting for long for permission to destroy the goods, no permission is received and the destruction is carried out by party on its own in their premises, then the demand of duty cannot be sustained. It is not coming out from the records in this case as to whether permission was sought for by the appellant and still the party had destroyed the goods circumventing requirement of grant of some reasonable period to the department or not. If reasonable time was not allowed by the party, the duty shall be demandable otherwi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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