TaxTMI 
TaxTMI 
2013 (7) TMI 563
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.... and penalty. On adjudication, an amount of Rs.6,22,500/- along with interest is confirmed against them and a penalty equal to the said amount is imposed under Rule 15 (1) of CCR. 3. On appeal with the Commissioner (Appeal), the Commissioner (Appeal) relied on Circular No. 6/2010-Cus dated 19-03-2010 clarifying that supplies to SEZ units should be treated as exports and set aside the impugned order. Aggrieved by the order, Revenue has filed this appeal. 4. There is a cross objection filed by the Respondent. The cross objection only pleads for dismissal of the appeal filed by Revenue and no extra relief is prayed for. 5.01. The Ld. A. R. submits that the meaning of the word export is not defined in Central Excise Act or Rules. It is defined in Customs Act, 1962. This meaning has been applied for the purpose of implementing Central Excise Act and Rules all along. There is a separate definition for this word under SEZ Act, 2005. As per this definition, supply of goods from Domestic Tariff Area to units in SEZ is also to be treated as exports. This is a deeming fiction which can apply only to the provisions in SEZ Act. He submits that whether this deeming fiction will have effect i....
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....rt by itself is a deemed export. It cannot by any stretch of imagination be extended for the local sale to DTA or the local sale made by the petitioner to another 100 percent Export Oriented Unit. The endeavour of the learned counsel for the petitioner to satisfy the Court to accept his contention to the effect even for the export obligation purpose, the deemed export could be taken as an export for consideration and not for the DTA sale. In a fiscal statute of this nature, it is well established legal principle that the policy or any notification has to be interpreted strictly and the wisdom of the respondents cannot be tested unless there is an ambiguity or obscurity in the notification or circular issued by the respondents. The circular is very clear in its terms and clarified the issue that in order to comply the DTA sale, the event or the transaction should be a physical export, and not a deemed export. 5.09. The clarificatory circular No. 06/2010-Cus dated 19-03-2010 relied upon by Commissioner (Appeals) clarifies only that when goods manufactured by a manufacturer is supplied to a unit in SEZ following the procedure notified under Rule 18 and 19 of Central Excise Rules the ....
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....ion tax leviable under section 98 of the Finance (No. 2) Act, 2004 in case the taxable securities transactions are entered into by a non-resident through the International Financial Services Centre; (g) exemption from the levy of taxes on the sale or purchase of goods other than newspapers under the Central Sales Tax Act, 1956 if such goods are meant to carry on the authorised operations by the Developer or entrepreneur. (2) The Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions, concessions, drawback or other benefits shall be granted to the Developer or entrepreneur under sub-section (1). 6.03. Further, he relies on section 51 of SEZ Act which reads as under: 51. (1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. 6.04. Further, he requests the Tribunal to take note of the arguments as given in para 20 of the order of the High Court in the case of Essar Steel which reads as under: 20. The provisions of Section 53 of the SEZ Act, 2005 do....
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....relies on the ruling of the Hon Court in para 41.2.9 as under: 41.2.9 Rule 27 permits a Unit or Developer to import or procure from the Domestic Tariff Area all types of goods, without payment of duty or procure from the Domestic Tariff Area such goods after availing export entitlements. This means that the export entitlements available on account of the export of goods from the Domestic Tariff Area to the Special Economic Zone are available either to the Domestic Tariff Area supplier or the Special Economic Zone Unit/Developer at their option. Therefore, duty drawback or DEPB and/or other export benefits would be available to either party at their option. The sweeping exemption granted under this provision renders the contention of the Department regarding liability of the goods to levy of Export Duty, academic since this provision exempts the goods brought in by the Special Economic Zone Unit from all levies and duties. Since the duty is leviable on the goods, it would be irrational to contend that the export from the Domestic Tariff Area to the Special Economic Zone should be taxed while the inward movement of the goods from the Domestic Tariff Area to the Special Economic Zone....
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.... considered arguments on both sides. I have gone through the circulars 29/2006-Cus dated 27-12-2006 and Circular 06/2010-Cus dated 19-03-2010 which clearly demonstrate the intention of the government to treat supplies of goods to SEZs and units in SEZs as exports for the purpose of granting relief from excise duty on goods supplied from DTA units. The Gujarat High Court in the case of Essar Steel (supra), even while deciding that for the purpose of imposing export duty, supplies to SEZ units cannot be treated as export, in para 41.2.9 has affirmed that benefit of refund, drawback, rebate etc on goods supplied to units in SEZ cannot be denied. So, I am in agreement with the line of argument of the respondent that supplies to units in SEZ units without payment of excise duty are in conformity with the policies of the government announced from time to time and also authorized by the provisions of SEZ Act. The decision in the case of Essar Steel (supra) does not alter the position though it negated levy of export duty. Such levy was against the provisions of Customs Act, 1962 and also SEZ Act 2005 as is lucidly explained by the Hon. High Court in its judgement. This view is further aff....