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TMI Blog2004 (5) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... an approved unit in the Kandla Special Economic Zone, for manufacture of Recycled Metal Scrap vides letter of permission no. KFTZ/IZ/1587/95/7670, dated 22-9-95 issued by the Development Commissioner, Kandla Special Economic Zone. The Development Commissioner, Kandla Special Economic Zone, approved the unit on the condition that it has to export its entire production. They are also permitted to clear the goods 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance licences from SEZ unit from 16-5-2001 only. The clearances took place during January-February, 2001. 6. The unit had cleared 168.608 MT of copper scrap into DTA which were valued at Rs. 1,20,39,878/- (and 186.276 MT of Copper scrap, 17.669 MT of Aluminium scrap totally valued at Rs. 1,48,44,326/- in DTA) respectively against Advance Licences availing exemption under the Notification No. 82/92-C.E., dated 27-8-92. The duty on such clearances (Central Excise duty equivalent to the aggregate duties of Customs) works out to Rs. 80,77,124/- and Rs. 96,26,632/- respectively was sought to be recovered from the unit under the provisions of Section 11A of the Central Excise Act, 1944. 7. The Deputy Commissioner confirmed the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Economic Zone") and cleared to units holding duty free import licence aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f units in Special Economic Zone was detailed. Thus Kandla Free Trade Zone which was converted in Kandla Special Economic Zone was governed by this Circular No. 92/2000-Cus., dated 20-11-2000. Para 2 of the said Circular reads as follows : "2. The SEZ scheme envisages a simple and transparent policy and procedures for the promotion of exports with minimum paper work. The scheme is detailed under Paragraphs 9.30 to 9.43 of the Exim Policy and paragraphs 9.41 to 9.46 of Handbook of Procedures (Vol. 1). The most important feature of the scheme is that the SEZ area shall deemed to be a foreign territory for the purpose of duties and taxes. Therefore, goods supplied to SEZ from the Domestic Tariff Area (DTA) will be treated as deemed expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial Economic Zone was defined in the notification. Thus strictly speaking, prior to 27-3-2001, under the Central Excise Rules, there was no notification specifying the geographical boundary of Kandla Special Economic Zone. It was also for the first that the word SEZ was used in a Central Excise notification. It may also be noted under the Central Excise Rules, 1944 Rule 2(9) continued to exist defining Kandla Free Trade Zone boundaries. On comparison it is observed that Kandla Free Trade Zone defined in Rule 2(9) of the Central Excise Rules, 1944 and the Kandla SEZ defined under Notification No. 12/2001 are having identical boundaries. Under Central Excise Rules, 1944 the Kandla Free Trade Zone continued to co-exist till 20-6-2001. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 Zon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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