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TMI Blog2024 (2) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise duty (Pan Masala and Tobacco Products) under Finance Act, 2005, to which also the provision regarding levy and collection under the Central Excise Act, 1944 and the Rules made thereunder has been made applicable, that provision of Section 5A of the Central Excise Act, 1944 providing for exemption from the levy could have been applied if the Central Government so choose. The appellant was completely justified in contending that the provisions of the Central Excise Act, 1944 with regard to levy and collection of Central Excise duty, to the extent they are not inconsistent, apply equally to the provisions of the Finance Act and accordingly the levy under the Finance Act will apply to goods manufactured or produced in India, other than the goods produced or manufactured in SEZ. There are also substance in the appellant s contention to the effect that the duties under the concerned Finance Acts, being in addition to any other duty of excise, chargeable on such goods under the Central Excise Act, is a clear indication that the levy under the relevant Finance Acts is in itself in the nature of a duty of excise chargeable on goods under Section 3 of the Central Excise Act, 1944. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority has rejected the contention that in terms of Section 30 of SEZ Act, duties of Customs including anti-dumping, countervailing and safeguard duty under the Customs Tariff Act, 1975 as leviable on such goods, when imported into India, stood levied and collected and that there would be duplication of the duties, if the levy under the Finance Acts were once again levied and collected, by holding that if the SEZ was deemed to be a territory outside the Customs Territory of India for undertaking authorised operations then clearances from SEZ into DTA should have been reckoned as exports for the SEZ and imports for the DTA. However, the definition of exports in Section 2(m) of the SEZ Act does not consider such a supply as an export for the SEZ unit, therefore it could safely be concluded that clearance from SEZ to DTA is a normal clearance of goods manufactured within India and consequently all the levies of duties/cesses under the Central Law enactments in respect of clearance of manufactured goods shall apply, subject to exemption, if any granted from such levy/duty/cess. 2. Shri Vishal Agarwal, learned counsel with Ms. Dimple Gohil, Advocate appearing on behalf of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1975, additional duties of customs equivalent to duty of excise on like goods produced or manufactured in India. Therefore, SAED, RIC and AIDC stood already levied and discharged as a part of the Additional Duty of Customs, when the goods were cleared from the SEZ to the DTA. Since duty of excise had already been recovered as a part of additional duty of customs in terms of section 30 of the SEZ Act, it was impermissible to once again independently recover the same as a duty of excise leviable in terms of the respective Finance Acts. 3. On the other hand Shri Rajesh R. Kurup, Learned Superintendent (Authorised Representative) appearing on behalf of the Revenue reiterates the findings of the adjudicating authority in the impugned order. In particular, it has been contended that unlike the Central Excise Act, there was no exclusion provided for goods produced or manufactured in an SEZ under the Finance Acts in question. Further the SEZ cannot be considered as a territory outside India as contended by the Appellant, the SEZ is only considered outside the Customs territory of India for undertaking authorised operations and therefore the levy under the Finance Act, would apply even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority could have concluded that the removal from the SEZ to the DTA is just a normal clearance of manufactured goods within India, when Section 30 of the SEZ Act stipulates that, any goods removed from the SEZ will be chargeable to duties of customs, as leviable on such goods when imported. Further, Rule 47 of the SEZ Rules, 2006 envisages that the DTA sale of goods manufactured by an SEZ unit shall be against submission of import license as applicable to imports of similar goods into India under the Foreign Trade Policy. Rule 48 requires a bill entry for home consumption to be filed in respect of clearances to the DTA, and further envisages that the valuation and assessment shall be made in accordance with the Customs Act and Rules made thereunder. Merely because there is a specific definition of export under the SEZ Act and clearance from SEZ to DTA does not fall within the said definition of export for the purpose of the SEZ this however is no ground for holding that the removal from the SEZ to the DTA which is normally assessed but also considered for all purposes as an import, being considered as a normal clearance of goods manufactured within India. In our view two statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to once again suffer the duties of SAED/RIC and AIDC, under the Finance Acts as a duty of excise, which already from a part of addition duty under section 3(1) of Customs Tariff Act. Such an interpretation cannot be countenanced as it would lead to an invidious situation of removal from the SEZ to DTA, being tax higher than imports of goods into the country, this is contrary to the legislative principle of regarding removal from SEZ to the DTA as an import. 4.7 It is also relevant to note here that under the EOU scheme there was no provision akin to section 53 of the SEZ Act, with these the SEZ to be a territory outside the Customs Territory of India for undertaking authorized operations. This deeming provision has been acknowledged by the CBIC even for the period prior to the enactment of the SEZ Act, 2005 vide Circular No.68/2003-CUS dated 30.07.2003 wherein it was clarified that "SEZ will be considered as a Foreign Territory for the purpose of duties and taxes. In other words supplies from DTA to SEZ will be considered as exports by the DTA unit and supply to DTA by the SEZ will be considered as import by the DTA unit." The said Circular further clarifies that "supplies to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... geable on goods specified in the Eighth Schedule shall be in addition to any other duties of excise chargeable on such goods under the Central Excise Act, or any other law for the time being in force. (3) The provisions of the Central Excise Act, and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty, shall, as far as may be, apply in relation to the levy and collection of the Special Additional Excise Duty leviable under this section in respect of the goods specified in the Eighth Schedule, as they apply in relation to the levy and collection of the duties of excise on such goods under that Act, or those rules, as the case may be. Relevant extracts of Finance Act, 2018: 112. Road and Infrastructure Cess on excisable goods. -- (1) There shall be levied and collected, in accordance with the provisions of this Chapter, for the purposes of the Union, an additional duty of excise, to be called the Road and Infrastructure Cess, on the goods specified in the Sixth Schedule (hereinafter referred to as scheduled goods), being the goods manufactured or produced, at the rates specified in the said Schedule for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of duties of excise on such goods under the said Act or the rules or regulations, as the case maybe. 4.9. To recapitulate, the four components identified by the Apex Court as constituting necessary and essential elements which have to be present in the taxing statute in a clear, unambiguous, and a definitive manner for the levy of tax to sustain are the following:- a) enunciation of the taxable event; b) indication of the person on whom the levy is imposed and is obliged to pay the tax; c) rate at which the tax is imposed; d) the measure and value to which the rate will be applied. Of the above four components, clearly the provisions of the three Finance Acts under which SAED, AIDC and RIC have been levied, when read on a standalone basis without reference to the levy and collection provisions in the Central Excise Act do not specify either the person liable to pay tax which is component No.2 or the measure and the value to which the rate is to be applied, which is component No.4. The three Finance Acts are therefore, in our view, not self-contained and therefore do not by themselves constitute a complete code to levy and collect the duties leviable thereunder. 4.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the Fourth Schedule : Provided that the duty of excise which shall be levied and collected on any excisable goods which are produced or manufactured by a hundred per cent. export-oriented undertaking and brought to any other place in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 (51 of 1975). Explanation 1. -- Where in respect of any such like goods, any duty of customs leviable for the time being in force is leviable at different rates, then, such duty shall, for the purposes of this proviso, be deemed to be leviable at the highest of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. SECTION 8. Intra-State supply. -- (1) Subject to the provisions of section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply : Provided that the following supply of goods shall not be treated as intra-State supply, namely :- (i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit; (ii) goods imported into the territory of India till they cross the customs frontiers of India; or (iii) supplies made to a tourist referred to in section 15. (2) Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply : Provided that the intra-State supply of services shall not include supply of services to or by a Special Economic Zone developer or a Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of services, where the location of the supplier and the place of supply are in - (a) two different States; (b) two different Union territories; or (c) a State and a Union territory, shall be treated as a supply of services in the course of inter-State trade or commerce. (4) Supply of services imported into the territory of India shall be treated to be a supply of services in the course of inter-State trade or commerce. (5) Supply of goods or services or both, - (a) when the supplier is located in India and the place of supply is outside India; (b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or (c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce. 4.12. It is evident from a perusal of the charging provisions of the Central Excise Act, Customs Act, Chapter V of Finance Act, etc that they intertwine categorically the taxable event attracting the levy with reference to its territorial coverage. For instance, the Central Excise Act, provides that the Central Excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of duties under the relevant Finance Acts. 4.14. The expression "as far as may be" has been explained by the Apex Court in the case of Dr. Pratap Singh vs the Directorate of Enforcement reported in AIR 1985 SC 989 to mean that the provisions of the Act being referred to have to be followed to the extent possible. Applying the ratio laid down by the Apex Court in the case of Dr. Pratap Singh, it is imperative on the Central Excise authorities to give effect to the provision regarding levy and collection of Central Excise duty under the Central Excise Act, 1944 and the Rules made there under, to the extent the same is possible and that only if necessary a deviation from the same can be undertaken to give effect to the purpose of the Finance Act. In other words, subject to there being no inconsistency or conflict, between the provisions of the Central Excise Act, and the Rules made thereunder vis-à-vis the Finance Acts, referred to above, the provisions relating to levy and collection of Central Excise duty under the Central Excise Act 1944 and the Rules made thereunder would equally apply to the levy under the relevant Finance Act. In case there is any inconsistency or con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d collection under the Finance Acts. 4.19. We also find force in the appellant's submission that had it not been for invocation of the provisions of the Central Excise Act, 1944 particularly Section 3B thereof, which, stipulates that in cases where circumstances exist, the Central Government can amend the rate schedule so as to increase the rate of duty, that the amendment to the 8th Schedule to the Finance Act, 2002 by Notification No.25/2022-CE dated 31-8-2022, so as to increase the rate of duty of SAED from Rs.6/- per litre to Rs.12/- per litre on aviation turbine fuel would not have been possible. The text of Section 3B of the Central Excise Act, 1944 is extracted herein below:- "SECTION 3B. Emergency power of Central Government to increase duty of excise. -- (1) Where, in respect of any goods, the Central Government is satisfied that the duty leviable thereon under section 3 should be increased and that circumstances exist which render it necessary to take immediate action, the Central Government may, by notification in the Official Gazette, amend the Fourth Schedule to substitute the rate of duty specified therein in respect of such goods in the following manner, namely :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's contention therein that an exemption granted from the levy of Central Excise duty under the Central Excise Act, 1944 would ipso facto apply to the levy of other excise duties under the other Finance Acts. It is, however relevant to note here that there is no dispute therein that the Central Government could have in exercise of powers under Section 5A of the Central Excise Act, granted exemption from the levy of excise duty by way of Education cess under the Finance Act, 2004 as also NCCD under the Finance Act, 2001 and Additional Excise duty (Pan Masala and Tobacco Products) under Finance Act, 2005. 4.22. The dispute in the present case is whether the provisions of the Central Excise Act, 1944 can be resorted to while construing the provisions governing levy and collection of duty under the three Finance Acts viz: SAED under the Finance Act 2002; RIC under the Finance Act 2018 and AIDC under the Finance Act, 2021. In our view the judgement in the case of Unicorn infact supports the case of the appellant inasmuch as the Apex Court held that while construing the levy and collection provisions with respect to Education cess under the Finance Act, 2004 as also NCCD unde ..... 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