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TMI Blog2011 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... available only to the SEZ Units and not to the Developer of the Units. The same was sought to be extended to the Developer of the SEZ Unit and that too for their authorized operations and not for any other purpose, by way of amendment which came into force from 31-12-2008, which was much after the relevant period. Merely because the amending Notification stated that the clause was substituted for the original clause. It cannot be construed that it has come into operation retrospectively. Neither the Notification itself discloses the same nor any other material has been placed on record from which the intention of the Government could be disclosed that extension of the benefit to the Developer of SEZ was to be effective retrospectively. Mere word 'substitution' cannot amount to extending the benefit retrospective. Regarding penalty - This issue need not be dealt with while dealing with the stay application and can be dealt with at the time of final hearing of the matter - directed the appellants to deposit 60 per cent of the amount demanded under the impugned order along with interest thereon within a period of ten weeks. On deposit of such amount, the balance amount shall stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was amended under the said Notification which clearly stated that the amendment was by way of substitution and, therefore, it has to be retrospective in nature and hence it would apply even to the relevant period. In that regard, reliance is sought to be placed in the decision of the Tribunal in the matter of Sharman Fabrics v. CCE 2006 (200) ELT 615 (Trib.-Delhi) read with Supreme Court's decision in the matter of Government of India v. Indian Tobacco Association 2005 (187) ELT 162. He further submitted that the supply to SEZ is always considered in a nature of export and the term 'export' has been defined under section 2(m) of the Special Economic Zones Act, 2005. According to the definition, supply of goods to Unit or Developer of the Unit would amount to export. Being so, since the appellants were supplying the product to the SEZ Developer, it would amount to export and hence the question of denying the credit on the ground on which it is sought to be denied, cannot arise. Besides, the Tribunal has consistently held that the amendment carried out to Rule 6(6) being in the nature of substitution, it would be effective retrospectively and in that regard, attention is sought to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenge in the matter, it is to be noted that clause (i) of Rule 6(6) of the CENVAT Credit Rules, 2004 as it was in force at the relevant time read thus:- "cleared to a unit in a special economic zone". The Government amended the said provision of the Rule under Notification No. 50/2008-CE (NT) dated 31-12-2008 by substituting the above quoted clause by the following clause:- "cleared to a unit in a special economic zone or to a developer of a special economic zone for their authorized operations, or". 7. The contention on behalf of the appellants is that the amendment being by way of substitution, it will operate retrospectively. In that regard, heavy reliance is placed in the decision of the Tribunal in Sharman Fabrics case (supra) and of the Supreme Court in Indian Tobacco Association case (supra). 8. The Apex Court in Indian Tobacco Association case (supra) was dealing with a matter to ascertain the effect of subsequent notification which was issued to substitute certain words in the Notification describing the area identified under earlier Notification. Para 20 of the decision of the Apex Court reads thus: "20. The Commissioner of Customs has advisedly not exercised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with prospective effect, it could have said so explicitly. Such a benefit could also have been extended by taking recourse to the proviso appended to sub-clause (iv) of clause (2) of the notification dated 7-4-1997. It may, therefore, be safely concluded that by reason of the amended notification, the Central Government only intended to rectify a mistake and, thus, the same will have retrospective effect and retroactive operation." 9. A plain reading of the said decision would disclose that the Apex Court, taking into consideration the object and the purport of substitution of the original words by the new words in the Notification, clearly observed that by the said substitution, the Government had granted benefit under the notification available to the exporters who were registered at other seaports and airports also. Being so, the effect of the substitution was to give full effect to the intention of the Government regarding availability of the benefit to the entire class of persons engaged in the business of export and not confining it to a small area of Tuticorin and Vishakhapatnam. In other words, the benefit which was made for exporters was extended to the exporters from al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in Wardha Coal Transport (P.) Ltd. case (supra) concerned, the ratio thereof is whenever the Tribunal takes a particular stand in relation to a particular fact situation, then unless there are compelling reasons to take a different view in similar fact situation, order taking different view cannot be passed. 12. As far as the order in MTC Rolling Mills (P.) Ltd. case (supra) concerned, the same was squarely based on Sujan Metal Products Ltd. case and Dalmia Cements (Bharat) Ltd. v. CCE [2006] 3 STT 354 (Chennai - CESTAT) which were undisputedly stay orders. The order did not discuss the provision of law and being a stay order cannot be said to lay down a binding precedent. Similarly, the order in Bhagwati Steel Cast Ltd. case (supra) was based on the order in Surya Roshni Ltd. case (supra) and hence is of no help. 13. If one peruses the amendment which has been brought to Rule 6(6)(i), it is apparent that during the relevant period the benefit was essentially available only to the SEZ Units and not to the Developer of the Units. The same was sought to be extended to the Developer of the SEZ Unit and that too for their authorized operations and not for any other purpose, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of section 2(m) thereof. Considering the said definition, supply of goods to a Unit or a Developer of Unit would amount to export. It is equally true that under section 51, the provisions of the said Act gives overriding effect. However, the said definition is in relation to the words used in the said Act and not the words used in some other Act and this is also clear from the opening expression in section 2 itself. It has been stated therein that "In this Act, unless the context otherwise requires...." and thereafter the words have been defined. Apparently, the definitions are for the purpose of understanding those the words which appear in the said Act itself and not in relation to the similar expressions used in some other statutes. The definition of the term "export" under the Special Economic Zones Act, 2005 cannot be imported either in the Central Excise Act or even in the Customs Act, 1962. Those words will have to be understood in the context in which they are used in respect of statutes. 17. Section 51 which deals with overriding effect of the SEZ Act, 2005 provides that the provisions of this Act shall have effect notwithstanding anything inconsistent therewith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court held thus:- "41.2-1 The Department has demanded Export Duty on the subject goods by invoking the provisions of section 12 of the Customs Act, 1962 read with section 2 and Second Schedule-Export Tariff (Heading No. 11) of the Customs Tariff Act, 1975 and for the purpose of considering the effective rate of duty, has taken into account Notifications issued under section 25 of the Customs Act, 1962. Therefore even as per the Department, the levy and the procedure adopted for recovery thereof is under the Customs Act, 1962 and the aforesaid issue does not arise for consideration on the stand of the Department itself. 41.2-2 The provisions of the SEZ Act do not envisage the movement of goods from the Domestic Tariff Area to the Special Economic Zone to be a taxable event as the said provisions do not contain any charging provision providing for the levy and imposition of Export Duty, and the said Act does not contain any provisions for recovery of such duty. In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the first Act are being invoked. Even in the absence of a definition of the term in the subject statute, a definition contained in another statute cannot be adopted since a word may mean different things depending on the setting and context. Reference is invited to the decisions of the Apex Court in the case of Commissioner of Wealth Tax Gujarat-III, Ahmedabad v. Ellis Bridge Gymkhana [1998] 1 SCC 384, Commissioner of Income-tax, Bangalore v. Venkateswara Hatcheries (P.) Ltd. [1999] 3 SCC 632 and M/s. Qazi Noorul H.H.H. Petrol Pump v. Dy. Director, E.S.I. Corporation, 2009 (240) E.L.T. 481 (SC)/2009 AIR SCW 5490. In fact, the interpretation canvassed by the department is not merely the adoption of a definition of another Statute, but the incorporation of a taxable event itself, which is impermissible under the law. 41.3-2 The movement of goods from the Domestic Tariff Area to the Special Economic Zone has been treated as export by a legal fiction created under the SEZ Act, 2005. A legal fiction is to be restricted to the statute which creates it. Reference is made to the decisions of the Apex Court in the case of State of West Bengal v. Sadan K. Bormal [2004] 6 SCC 59, Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, is misconceived. Section 53 provides that the Zone would be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorized operations. The term "customs territory" cannot be equated to the territory of India and in fact, such term has been defined in the General Agreement of Tariffs Trade, to which India is a signatory, to mean an area subject to common tariff and regulations of commerce and that there could be more than one customs territory in a country. Moreover such an interpretation would lead to a situation where a Special Economic Zone would not be subject to any laws whatsoever. The entire SEZ Act, 2005 would be rendered redundant since it is stated to extend the whole of India. In any case, various provisions of the SEZ Act would be rendered redundant and unworkable if the Special Economic Zone was to be considered an area outside India. This is apart from the fact that such a declaration would be constitutionally impermissible. 42. In view of the above discussion and findings arrived at as well as conclusion drawn, the levy of export duty on goods supplied from the Domestic Tariff Area to the Special Economic Zone is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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