TaxTMI 
TaxTMI 
2004 (5) TMI 360
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....ods under Para 9A 8 of the Exim Policy against Advance Licence issued by the competent authority. 4. As per the letter of permission granted to the unit, appellants were importing various kinds of scrap such as cable scrap, compressor scrap, transformer scrap etc. These scrap goods were subjected to processes of cutting, segregating, cleaning etc. and metals such as copper, aluminium, iron etc. were segregated. These finished goods were cleared in accordance with the provisions of the Exim Policy read with Notifications issued in this regard. These goods could be cleared into DTA, subject to fulfilment of export obligations under the policy, on payment of applicable central excise duty. According to the provisions of Section 3 of the Central Excise Act, 1944, such duties of excise shall be an amount equal to the aggregate of the duties of customs, which would be leviable on like goods if imported into India. 5. Para 9.A.8(d) enables the SEZ units to supply their finished goods against Advance Licence issued by the competent licensing authority which will be counted towards their export performance. The unit had cleared their finished goods into DTA duty free against....
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....Finance. (e) Accordingly the demand notice may please be withdrawn and the impugned order set aside. 9. Personal hearing in the matter of stay application was held on 10-3-2004. Under the Stay Orders Nos. 6 to 7 /2004/KDL, dated 1-4-2004 the appellant were directed to deposit Rs. 9,60,000/- and Rs. 8,00,000/- respectively which they complied vide Challan No. 1/2004-05, dated 23-4-2004 and Challan No. 2/2004-05, dated 23-4-2004. 10. Personal hearing in the matter of main appeals was held on 12-5-2004 during which Shri Uday Joshi, Advocate appeared and reiterated the grounds raised in the previous submission. Further the ld. Advocate also filed a written submission dated 13-5-2004 whereby they highlighted the main grounds. 11. I have carefully gone through the facts of the case and the various submissions advanced by the appellants. 12. The Deputy Commissioner has denied the benefit of Notification No. 82/92-C.E., dated 27-8-1992 to the appellant on the solitary ground that this Notification exempts the excisable goods produced or manufactured in 100% EOU or in a "Free Trade Zone" (i.e. not to "Special Econo....
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....It may be seen from Paragraph 9.30 of the EXIM Policy that in any SEZ, goods may be imported/procured from DTA duty free for the purpose of manufacture of goods and services, production, processing, assembling, trading, repair, reconditioning, re-engineering, packaging or in connection therewith and export thereof. The notifications referred to above have been issued to implement the above Policy provisions. It may be seen that the duty free import facility is not applicable to prohibited goods under the EXIM Policy. 12.2 - The DTA clearance referred to in Paragraph 12.1 above shall not be available to the trading units. However, the trading units in the SEZ may be allowed to clear the imported/indigenously procured goods in the DTA without payment of duty to other SEZ/EOU/EPZ/EHTP/STP units. Further, they may be allowed to clear the said goods without payment of duty, if such clearance is against Advance Licences or special duty free entitlements." The unit of the appellant which was earlier located in the Kandla Free Trade Zone was thus automatically became a unit in Kandla Special Economic Zone and procedures issued by the Circular No. 92/2000 were also made applicable. ....
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....omic Zone became operative only from 11-5-2001. In other words, Central Excise duty can be demanded only with effect from 11-5-2001 from a unit located in Special Economic Zone. Accordingly, on this count also, the duty cannot be demanded from the appellants unit as disputed period involved in the appeal is prior to 11-5-2001. 15. Keeping in view that Notification No. 12/2001-C.E., dated 27-3-2001 prescribing the geographical boundary of Kandla Special Economic Zone was issued under the Central Excise Rules only on 27-3-2001 and the fact that charging Section 3 was amended on 11-5-2001, it appears that under Central Excise Rules, technically speaking, Kandla Free Trade Zone continued to co-exist till 26-3-2001 despite the fact that Ministry of Commerce had issued resolution on 1-11-2000 declaring "Kandla Free Trade Zone" as "Kandla Special Economic Zone." Since the duty under the impugned Orders has been demanded for the period from January - February 2001 on the ground that this unit was located in Kandla Special Economic Zone and the duty has been demanded under Section 3, there does not appear to be any legal backing to it. In view of the above, the benefit of Notificati....