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2015 (9) TMI 722 - AT - Central ExciseBenefit of exemption under Notification No. 58/2003-CE dated 22/7/2003 - SEZ - Held that - Appellant was claiming exemption under Notification No. 58/2003-CE dated 22/07/2003. The said notification exempts Duty of Excise under Section 3 of the Central Excise Act and Additional Duty of Excise under sub-Section (1) of Section 3 of the Additional Duty of Excise (Goods of Special Importance) Act, 1957. Another Additional Duty of Excise on tobacco products was levied by virtue of Section 85 of the Finance Act, 2005. The appellant could not produce any record to show that their product cleared to SEZ need not suffer the said new levy. The only plea taken was that all clearances to SEZ should be considered as export and no duty need be paid. Further, since the clearances are as per procurement certificate and bond the Department cannot demand any additional duty. Except for general principal that clearances to SEZ units should be equated to export the appellant could not produce the legal basis for such assertion. The clearances to units in SEZ are to be considered as export as per the provisions of Special Economic Zone Act, 2005 is not applicable to the period in the present proceedings which were much earlier. - Decided against assessee.
Issues: Manufacturer availing exemption under Notification No. 58/2003-CE for clearances to units in SEZ; Demand of Additional Duty of Excise under Section 85 of Finance Act, 2005; Whether clearances to SEZ should be considered as export; Applicability of Notification No. 58/2003-CE to exempt Additional Duty of Excise on tobacco products.
Analysis: The appellant, a manufacturer of cigarettes and processed cut tobacco, cleared processed cut tobacco under Chapter Heading 24039970 to units in Special Economic Zones (SEZ) by availing exemption under Notification No. 58/2003-CE. The Department initiated proceedings to demand additional duty of excise leviable under Section 85 of the Finance Act, 2005. The impugned order confirmed the demand of Additional Duty of Excise along with Education Cess. The appellant contended that the clearances to SEZ were made based on procurement certificates issued by Customs Authorities after executing bonds, and thus, no Additional Duty of Excise should be payable. They argued that clearances to SEZ should be treated as exports, exempt from duty. On the other hand, the Department argued that the appellant was rightly eligible for Notification No. 58/2003-CE, which did not exempt the Additional Duty of Excise under Section 85 of the Finance Act, 2005 on tobacco products. After hearing both sides, the Tribunal noted that the appellant failed to demonstrate that their product cleared to SEZ was exempt from the Additional Duty of Excise imposed by the Finance Act, 2005. The appellant's assertion that clearances to SEZ should be considered as exports lacked a legal basis. The Tribunal highlighted that the provisions of the Special Economic Zone Act, 2005, equating clearances to SEZ as exports, were not applicable to the relevant period under consideration. Consequently, the Tribunal found no merit in the appeal and dismissed it. In conclusion, the Tribunal upheld the demand for Additional Duty of Excise on tobacco products from the appellant, ruling that the clearances to SEZ could not be equated to exports during the relevant period, and the exemption under Notification No. 58/2003-CE did not cover the Additional Duty of Excise imposed by the Finance Act, 2005.
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