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TMI BlogClearance from DTA to Free Trade Ware Housing Zone-Export BenefitsX X X X Extracts X X X X X X X X Extracts X X X X ..... Clearance from DTA to Free Trade Ware Housing Zone-Export Benefits X X X X Extracts X X X X X X X X Extracts X X X X ..... SETHI: The Reply: Sh.Arbs Sarma Ji, Pl. go through this extract of Board[s circular. It is an answer to your query. Central Excise Tariff Conference - Clarifications on technical issues of classification and assessment Instruction F. No. 96/85/2015-CX.I, dated 7-12-2015 (EXTRACT) B13 - Hyderabad Zone - Scope of exemption - Admissibility to intermediate goods used in the manufacture of cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied to SEZ units : Issue : Notification No. 67/95-C.E., dated 16-3-1995 provides duty exemption to captively consumed inputs in the manufacture of dutiable final products. Exception to this notification is that this duty exemption is not applicable, if the final products are exempted from duty payment or attract nil rate of duty. An exception to this exception is when clearance of final pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts is made to a unit in Free Trade Zone (FTZ), a 100% EOU and a unit in Hardware Technology Park or Software Technology Park. Thus, when final products are supplied to FTZ, EOU etc. intermediate products continue to be exempted. Now, FTZ scheme does not exist and existing EPZ/FTZ have been notified as SEZ. The issue is whether the benefit of exemption to the intermediate product is available wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en final products are supplied to the SEZ. The issue has been discussed in the past tariff conference also but no final view was taken. Show Cause Notices have been issued in the zone on the subject. Discussion & Decision The conference after discussion noted that the issue has been decided by the Tribunal in case of M/s. Ultratech Cement and other manufacturers [2015 (10) TMI 1058 - CESTAT CHEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NAI] where the Tribunal decided that benefit of exemption to intermediate products is available when the final products are supplied to SEZ. Hon'ble Tribunal noted that during the relevant period of dispute, no FTZ was in operation and therefore no clearance could be made to FTZ as this was a period after the enactment of SEZ Act on 10-2-2006. Once the SEZ Act came into effect from 10-2-2006, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the units functioning as FTZ were declared as SEZ units. Notification no. 4/2003-C.E., dated 30-3-2003 was issued to convert various FTZs into SEZs. Further, as per the Notes explaining clauses of the Finance Bill, 2007 (clause 106), after enactment of SEZ Act, FTZs have become redundant and hence it sought to amend sub-section (1) of Section 3 of the Central Excise Act. By virtue of the above ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment, the word FTZ was omitted and substituted with the word SEZ in section 3 of the Central Excise Act, 1944. Consequently, tribunal concluded that now the expression FTZ in the notification no. 67/95-C.E. needs to be read as SEZ and the benefit of exemption extended to the intermediate goods when final goods are supplied to SEZ. Conference accepted this view and concluded that benefit of exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion should be extended to the intermediate goods when final goods are supplied to SEZ. Conference also recommended to the Board that notification no. 67/95-C.E. should be amended to avoid litigation on Reply By MARIAPPAN GOVINDARAJAN: The Reply: It is cleared that as per the notification cited by Shri Kasthurai Seth the benefits are also available to FTZ. Reply By KASTURI SETHI: The Reply: Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anks to SH.MARIAPPAN GOVINDARAJAN, Sir. Reply By KASTURI SETHI: The Reply: SH.MARIAPPAN GOVINDARAJAN JI, Sir, Can we say all types of FTZs are under one roof called SEZ now ? Reply By MARIAPPAN GOVINDARAJAN: The Reply: In my view it could not be said so, Sir, Shri Sethi Reply By KASTURI SETHI: The Reply: O.K. Sir. Thank you. Reply By surya narayana: The Reply: Dear Sirs, In one way, FTw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Zs also on the same footing of SEZ and all benefits would be available for clearances from DTA to FTWZs. This is because, the Notification clarification cited by Shri. Katuri Sethi ji was issued in the context of whether the intermediate products cleared to SEZ are eligible for exemption under Notification No. 67/95 (captive consumption) in view of FTZ only figuring in the Notification. The clari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication, states that FTZ was subsequently included in the definition of SEZ and hence , the benefit of the Notification is equally available. The Hon'ble High Court of Madras,in case of 12 Cement companies including Madras Cements held that the benefit of Notification is available even if the intermediate Goods are cleared to FTZ considering the definition of SEZ in the SEZ Act. Hope this is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear Best Regards Suryanarayana Reply By arbs sarma: The Reply: Thx sirs for your valuable suggestion. FTWZ Are existing and are in operation in certain places in India. In terms of Section 2(n) of SEZ Act FTWZ means a SEZ and in terms of Section 2(za) of said Act SEZ includes FTWZ. Reading both section together it appears both SEZ AND FTWZ are same. Thus clearances to FTWZ should get al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the benefits that are available in case of clearances to SEZ. From the above can we conclude that clearances to FTWZ be made under claim for rebate. regards Deepak Reply By KASTURI SETHI: The Reply: We can infer that there is a difference only in nomenclature otherwise benefit-wise both are on equal footing. Thanks to all sirs, Sh.Surya Narayana, SH.MARIAPPAN GOVINDARAJAN, Sh.Deepak who hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contributed to the clarification of the concept. X X X X Extracts X X X X X X X X Extracts X X X X
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