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2014 (12) TMI 270 - HC - CustomsLevy of CVD equal to duty of excise on clearance of goods from SEZ unit to DTA unit - Goods were exempted from levy of Duty of excise - Refund of the additional customs duty paid wrongly - Whether the unit can claim exemption from CVD based on an exemption Notification issued under Section 5A in view of specific bar under Section 5A for SEZ - Held that:- Section 30 of the SEZ Act only imposes a condition for a SEZ unit to clear the goods to a DTA. Such condition is payment of authorized duties including CVD as provided in the Customs Tariff Act as applicable and leviable on such goods when imported. By reference, therefore, the charging Section 3(1) of the Customs Tariff Act and such CVD would be leviable as if the goods cleared by SEZ unit to the DTA are in the nature of imports. If, therefore, by virtue of an exemption notification the whole of the excise duty payable as prescribed in the Central Excise Tariff Act is exempt for the local manufacturers, no CVD would be payable under Section 3(1) of the Customs Tariff Act on import of such goods. Section 3(1) uses the expression 'excise duty for the time being leviable on a like article if produced or manufactured in India'. The explanation explains the expression 'excise duty for the time being leviable on a like article if produced or manufactured in India' as to include the duty, which would be leviable on class or description of articles to which the imported article belongs, if such article is not produced or manufactured in India. However, the central concept remains the same, namely, the importer would have to pay CVD equivalent of the excise duty payable on a like article if produced or manufactured in India. In the present case, by virtue of the exemption notifications on a like article produced or manufactured in India there is no duty of excise payable or leviable is leviable. In other words, excise duty levied on such articles manufactured in India being nil, the CVD also, in terms of Section 3(1) of the Customs Tariff Act, would be nil. - The impugned order to the petition is quashed. On DTA clearance of SEZ unit, liability of countervailing duty under Section 30 of SEZ Act was imposed. This countervailing duty was equivalent to excise duty component to be paid by local manufacturer of like goods when produced or manufactured in India. Whether such liability would continue on SEZ units when local manufacturers were exempt has seen to be gathered from the language used in Section 30 of SEZ Act and not from proviso of subsection (1) of Section 5A of Central Excise Act. Even otherwise, Section 51 of SEZ Act gives overriding effect to the provisions of the Act. Thus, the entire legislative scheme has undergone a change by introduction of SEZ Act and the changes made in the Central Excise Act in this regard. As discussed earlier, legislative intention emerging is that a SEZ unit will have no [Sic] liability to pay countervailing duty, if the local manufacturer of like goods is exempt from payment of whole of such duty. - Decided in favour of assessee.
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