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2019 (5) TMI 450 - AT - Central ExciseConcessional rate of duty - benefit of Sr. No.3 to Notification No. 23/2003-CE dated 31.03.2003 - denial of benefit on the ground that when raw materials were procured from 100% EOU / SEZ units, the same amounts to imports for the purpose of procurement of goods by the Appellant and hence, ineligible for such benefit of Sr. No.3 to Notification No. 23/2003-CE dated 31.03.2003 - HELD THAT - The definition of the terms import and export in Customs Act, 1962, SEZ Act, 2005 as well as FT (D R) Act, 1992 clearly show that only the goods physically brought from outside India will be treated as imported goods. Since SEZ is located within India only, it cannot be assumed to be foreign territory. Even the deeming fiction created under Notification No.23/03-CE limits its scope to goods received from other 100% EOUs as well as certain deemed exports supplies under para 8.3(a) and (b) of the FTP. Such deeming fiction does not cover goods received from SEZ at all. That despite defining the term DTA in Notification No. 23/03-CE (Sr. No.3), the condition No.3 states that in order to claim benefit of concessional rate under Sr. No.3, wholly from raw materials produced or manufactured in India . The condition does not state that wholly from raw materials produced or manufactured in DTA , and such meaning therefore cannot be artificially assigned by revenue authorities. Since goods produced and supplied by SEZ unit to the Appellant are to be treated as produced in India only, the condition No.3 to Notification No. 23/03-CE can be said to be fulfilled in such circumstances. Benefit allowed - appeal allowed - decided in favor of appellant.
Issues:
1. Eligibility for concessional rate benefit under Notification No. 23/2003-CE for goods procured from other 100% EOUs and SEZ units. 2. Time-barred demands and compliance with procurement certificates. 3. Condonation of delay in filing appeal. 4. Interpretation of the term "import" for goods received from SEZ units for claiming benefit under Notification No. 23/2003-CE. Analysis: 1. The Appellant, a 100% EOU, faced demands seeking to deny concessional rate benefit under Notification No. 23/2003-CE for procuring goods from other 100% EOUs and SEZ units. The Tribunal allowed appeals related to inputs from other 100% EOUs, deeming the demand as time-barred based on compliance evidence similar to a precedent case. However, for goods received from SEZ units, the Tribunal analyzed the definition of "import" and "export" in relevant acts, concluding that SEZ being within India, goods from SEZ are not imported. Citing judicial precedents, the Tribunal held that SEZ goods are produced in India, satisfying the conditions of Notification No. 23/2003-CE, thereby allowing appeals except one remanded for delay condonation. 2. Appeals E/12091/2016 and E/10162/2018 involved the same period and demand, with separate appeals due to remand by the first appellate authority. The Tribunal found the demand time-barred for inputs from other 100% EOUs, aligning with a previous case. Appeal E/12185/2018 faced delay condonation issues, which the Tribunal rectified, remanding the case for further consideration. 3. The Tribunal considered the definition of "import" for goods received from SEZ units under Notification No. 23/2003-CE. Analyzing various judicial decisions, including those by the Gujarat, Andhra Pradesh, and Karnataka High Courts, the Tribunal concluded that SEZ goods are produced in India, meeting the Notification's conditions. Consequently, the Tribunal allowed all appeals except one remanded for further proceedings. 4. The judgment, pronounced on 15.03.2019 by the Appellate Tribunal CESTAT Ahmedabad, highlighted the complexities surrounding the eligibility for concessional rate benefits under Notification No. 23/2003-CE concerning goods procured from other 100% EOUs and SEZ units. The Tribunal's detailed analysis of the legal provisions, compliance evidence, and judicial precedents resulted in a nuanced decision allowing most appeals while remanding one for delay condonation and further review.
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