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2016 (1) TMI 17 - AT - Central ExciseMaintainability of appeal before the tribunal - whether in terms of clause (b) of proviso to section 35B(1) of the Central Excise Act, appeals against orders relating to rebate on goods supplied to SEZ, will lie to the Appellate Tribunal - Held that - In the case of Hindustan Petroleum Corpn. Ltd. vs. Commissioner of C.Ex, Mumbai 2013 (12) TMI 1133 - CESTAT MUMBAI the Tribunal held that appeal against orders on refund in respect of goods supplied to SEZ are not maintainable under proviso (c) to section 35(1) of the Central Excise Act. In the case of Tata Consultancy Services Ltd. vs. Commr. of C.Ex. & S.T (LTU), Mumbai 2012 (8) TMI 500 - CESTAT, MUMBAI an appeal regarding refund in respect of services supplied to SEZ was entertained by the Tribunal. Also in Commissioner vs. Shree PLA Pvt. Ltd. 2010 (3) TMI 995 - CESTAT BANGALORE Tribunal decided on appeal relating to exports from DTA to SEZ. In Rohit Poly Product Pvt. Ltd. 2013 (2) TMI 57 - GOVERNMENT OF INDIA and in Indo Amines Ltd. 2013 (3) TMI 142 - GOVERNMENT OF INDIA the Joint Secretary (RA) passed Orders-in-appeals against orders-in-appeal in matters relating to rebate on supplies from DTA to SEZ. Reading proviso (b) to section 35B to mean that it includes cases relating to goods supplied from DTA to SEZ is only an inevitable corollary to holding that such supplies may be treated as export. While doing so the legal fiction is not being extended beyond the purpose for which it was created. We hold so because there does not appear to be any intent to treat such deemed exports differently for the purpose of proviso (b) to section 35(1) (sic) of the Act. - in respect of rebate on goods supplied from DTA to SEZ within India, the appeals would not lie to the Appellate Tribunal under clause (b) of proviso to Section 35(1) of the Central Excise Act.
Issues Involved:
1. Jurisdiction of the Appellate Tribunal regarding appeals on rebate of duty for goods supplied to SEZ. 2. Interpretation of the phrase "exported to any country or territory outside India" in the context of SEZ supplies. 3. Legal fiction and its application to deemed exports. 4. Statutory provisions and their harmonization concerning rebate on goods supplied to SEZ. Detailed Analysis: 1. Jurisdiction of the Appellate Tribunal: The primary issue was whether the Appellate Tribunal has jurisdiction to decide appeals against orders related to the rebate of duty on goods supplied to SEZs, under clause (b) of the proviso to section 35B(1) of the Central Excise Act. The Tribunal noted that the language of the proviso explicitly states that no appeal shall lie to the Appellate Tribunal regarding orders related to a rebate of duty on goods exported outside India. The core question was whether this phrase includes supplies to SEZs, which are deemed exports under various provisions. 2. Interpretation of "Exported to any country or territory outside India": The appellant argued that this phrase should be strictly construed to mean physical exports outside India, relying on precedents like Ballarpur Industries Limited vs. Union of India and Essar Steel Limited vs. Union of India. They contended that supplies to SEZs, although treated as exports for certain purposes, should not be conflated with physical exports outside India. 3. Legal Fiction and Deemed Exports: The appellant emphasized that legal fictions, such as treating supplies to SEZs as exports, should be confined to their specific purposes. They cited judgments like Mancheri Puthusseri Ahmed and Ors. and Commissioner of Income Tax, Kanpur vs. Mother India Refrigeration Industries P. Ltd. to argue that such fictions should not extend beyond their intended scope. 4. Statutory Provisions and Harmonization: The Tribunal considered the statutory framework under which rebates are sanctioned, particularly Section 11B and Rule 18 of the Central Excise Rules, which pertain to goods exported out of India. The respondent argued that if supplies to SEZs are not treated as exports, there would be no statutory basis for granting rebates on such supplies. They pointed to provisions in the SEZ Act, such as Section 2(m) and Section 53, which treat SEZs as territories outside India's customs territory, thereby supporting the notion that supplies to SEZs should be treated as exports. Divergent Judgments: The Tribunal noted various conflicting judgments on this issue. For instance, in Hindustan Petroleum Corpn. Ltd. vs. Commissioner of C.Ex, Mumbai, the Tribunal held that appeals on refunds for goods supplied to SEZs were not maintainable. Conversely, in Tata Consultancy Services Ltd. vs. Commr. of C.Ex. & S.T (LTU), Mumbai, the Tribunal entertained such appeals. Conclusion: The Tribunal concluded that a harmonious construction of the relevant provisions leads to the conclusion that appeals in cases of rebate on goods supplied to SEZs do not lie with the Appellate Tribunal under clause (b) of the proviso to Section 35B(1) of the Central Excise Act. This interpretation aligns with the purpose of the statutory fiction and avoids rendering any provisions redundant or unworkable. The judgment emphasized that treating supplies to SEZs as exports for rebate purposes is a logical extension of the legal fiction created by the SEZ Act. Pronouncement: The judgment was pronounced in court on 17.12.2015.
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