M/S Western Tobacco Ltd vs Cce, Bhopal
- CitationExcise Appeal No. 4017 of 2006
Ratio decidendi
The rule this decision rests on
The Tribunal holds that clearances of excisable goods to units in a Special Economic Zone, during the period in question, are not to be treated as exports, and so cannot be claimed to be free of duty on that footing, the Special Economic Zone Act, 2005 not being applicable to the period in the proceedings. Where an assessee claims exemption from excise duty under a notification, the burden lies on the assessee to establish, with records and a legal basis, that the goods fall within the exemption; a general assertion that supplies to a unit in a Special Economic Zone are to be equated with exports, unsupported by any statutory or legal basis applicable to the relevant period, does not discharge that burden. The fact that supplies were made against a procurement certificate issued by the Customs authorities, on the execution of a bond, does not by itself exempt the goods from an additional duty of excise that the notification relied upon does not cover and that is not otherwise exempted during the relevant period.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of the Order-in-Appeal No. 205-CE/BPL/2006 dated 05/10/2006 passed by The Commissioner of Customs & Central Excise (Appeals), Bhopal.]
For Approval and signature :
Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri B. Ravichandran, Member (Technical)
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it would be released under Rule 27 of :
the CESTAT (Procedure) Rules, 1982 for
publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair :
copy of the order?
4. Whether order is to be circulated to the :
Department Authorities?
M/s Western Tobacco Ltd. Appellant
Versus
CCE, Bhopal Respondent
Appearance
Shri Vipul Agarwal, Advocate for the appellant.
Shri M.S. Negi, Authorized Representative (DR) for the Respondent.
CORAM: Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri B. Ravichandran, Member (Technical)
Final Order No. 52273/2015 Dated : 16/07/2015
Per. B. Ravichandran :-
The appellant in the present case is manufacturer of cigarettes and processed cut tobacco. They were clearing processed cut tobacco falling under Chapter Heading 24039970 by availing benefit of exemption under Notification No. 58/2003-CE dated 22/7/2003 to the units in the Special Economic Zones. Proceedings were initiated against the appellant to demand additional duty of excise leviable under Section 85 of Finance Act, 2005. The impugned order dated 22/06/2006 was passed confirming the demand of Additional Duty of Excise leviable under Section 85 of the Finance Act, 2005 alongwith Education Cess.
2. The appellant is before us against the impugned order. The learned Counsel pleaded that they have been availing exemption under Notification No. 58/2003-CE for the clearances to the units in SEZ. Later as per Section 85 of Finance Act, 2005 Additional Duty of Excise was imposed on the same product. Their main plea is that the supplies to units in SEZ were made as per the procurement certificate issued by the Customs Authorities and said certificate was issued after due execution of bond. The clearances to the units in SEZ was based on such bond and certificate and no Additional Duty of Excise is payable on the same. He also pleaded that the clearances to SEZ should be considered as export and no duty is chargeable on export items. Learned AR on the other hand contended that the appellant is rightly eligible for Notification No. 58/2003-CE which exempts excisable goods supplied to units in Special Economic Zone from whole of duty of excise leviable thereon under Section 3 of the Central Excise Act and Additional Duty of Excise leviable under sub-Section (1) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The Additional Duty of Excise leviable under Section 85 of the Finance Act, 2005 on Tobacco products is not exempted by the said notification or by any other notification during the relevant period and, as such, they are liable to Additional Duty of Excise as demanded. He also drew our attention to the fact clearances to units in SEZ cannot be considered as export during the material time. The consideration of clearances to SEZ as export came into being only after the enactment of Special Economic Zone Act, 2005.
3. Heard both the sides and considered their submissions and appeal records. The appellant was claiming exemption under Notification No. 58/2003-CE dated 22/07/2003. The said notification exempts Duty of Excise under Section 3 of the Central Excise Act and Additional Duty of Excise under sub-Section (1) of Section 3 of the Additional Duty of Excise (Goods of Special Importance) Act, 1957. Another Additional Duty of Excise on tobacco products was levied by virtue of Section 85 of the Finance Act, 2005. The appellant could not produce any record to show that their product cleared to SEZ need not suffer the said new levy. The only plea taken was that all clearances to SEZ should be considered as export and no duty need be paid. Further, since the clearances are as per procurement certificate and bond the Department cannot demand any additional duty. Except for general principal that clearances to SEZ units should be equated to export the appellant could not produce the legal basis for such assertion. The clearances to units in SEZ are to be considered as export as per the provisions of Special Economic Zone Act, 2005 is not applicable to the period in the present proceedings which were much earlier. Considering the above discussion, we find no merit in the appeal and the appeal is accordingly dismissed.
(Operative part of the order pronounced in the open court.)
(Ashok Jindal)
Member (Judicial)
(B. Ravichandran)
Member (Technical)
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