By TIOL News Service

MUMBAI, MAY 15, 2015: IN the present appeals the issue involved is rebate of duty paid on the goods supplied to Special Economic Zone.

The appeals were listed for maintainability, in view of the following exclusion clause under Section 35B (1) proviso to clause (b), under CEA, 1944.

"[Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to,-

(b) A rebate of duty of excise on goods exported to any country or territory outside India or on excisable materials used in the manufacture of goods which are exported to any country or territory outside India."

The appellant submitted that as per the proviso to Section 35B(1) and proviso clause (b), only in those cases, appeals shall not lie to the Appellate Tribunal, where rebate of duty of excise on goods exported to any country or territory outside India or an excisable material used in the manufacture of goods which are exported to any country or territory outside of India. Inasmuch as in the present case the goods on which duty was paid and refund thereof sought for was not exported to any country or territory which is "outside" India in the sense that the goods have been exported to Special Economic Zone which is located within country and territory of India. And, therefore, their case does not fall in the exclusion category.

The appellant also submitted that, in identical cases, on the following earlier occasions the Bench had entertained the appeals and disposed the same on merits.

(i) Ultratech Cement Ltd. Vs. Commissioner of Central Excise, Nagpur - 2014-TIOL-1506-CESTAT-MUM

(ii) Tata Consultancy Services Ltd. Vs. Commissioner of Central Excise & Service Tax (LTU), Mumbai - 2012-TIOL-1034-CESTAT-MUM

The AR submitted that supply made to SEZ is treated as export and, therefore,it squarely falls under clause (b) of proviso to Section 35B(1), accordingly the Appellate Tribunal has no jurisdiction to entertain the present appeals; that the right forum is the Joint Secretary - Revisionary Authority to Government of India against the impugned order.

Decisions of Tribunal and those passed by the Revisionary authority were also cited in support viz. Essel Propack Ltd. final order No. A/800-801/11/EB/C-II dated 29.08.2011. The Chattisgarh High Court decision in Union of India Vs. Steel Authority of India Ltd. - 2013-TIOL-384-HC-CHATTISGARH-CX was also relied upon.

After considering the submissions and extracting the proviso in question, the Bench observed -

"From the plain reading of above provision, we find that the wordings of clause (b) of proviso to Section 35B(1) is clear that only those cases where the goods have been exported to any country or territory which is outside of India, will fall under this clause and only in those cases this Appellate Tribunal has no jurisdiction to entertain the appeal. However, in the present case the goods were not exported to any country outside of India, but supply to SEZ which is undisputedly located within India. In view of this fact and legal provision of Section 35B(1) proviso to clause (b) a different meaning cannot be inferred as against the plain language of the provision which mandate that only in those cases where goods are export to outside of India, this Appellate Tribunal has no jurisdiction to entertain the appeal. Therefore, we are of the view that in the present case where refund/rebate is related to supplies made to SEZ within India, this Tribunal has jurisdiction to entertain the appeal. However as per judgment cited by rivals it is observed that in some of the judgments this Tribunal has entertained the appeals and disposed on the merits, and in some of the cases this Tribunal has viewed that this Tribunal does not have jurisdiction in the identical cases. It is also seen that even the Hon'ble Joint Secretary - Revisionary Authority to Government of India also entertained the identical cases and disposed of the same on merits. This shows that there are clearly divergent views among Benches of this Tribunal as well as the Hon'ble Joint Secretary (Revisionary Authority) to Government of India. Therefore, we are of the considered view that the matter should be placed before the Larger Bench to decide the preliminary issue that in the matter of refund/rebate against the supply of goods to the SEZ located in India, whether the appeal lies before this Appellate Tribunal or a Revision Application before the Joint Secretary (Revisionary Authority) to Government of India."

The Registry was directed to place the matter before the President for constituting the Larger Bench for answering the question as mentioned above.

Service in passing: Also see DDT 2555 & 2015-TIOL-577-HC-MUM-ST

(See 2015-TIOL-878-CESTAT-MUM)