Circular
No.881/01/2009-CX dated 07.1.2009
Payment of Additional Excise Duty (AED)
and Special Additional Excise duty (SAED) on motor spirit and high speed diesel
Payment of Additional Excise Duty (AED) and Special
Additional Excise duty (SAED) on motor spirit and high speed diesel and National
Calamity Contingent Duty (NCCD) on excisable goods exported from units located
in Special Economic Zone (SEZ)
I am directed to say that a point has been raised whether the Additional Excise
Duty (AED) and Special Additional Excise Duty (SAED) are payable on motor spirit
and high speed diesel when cleared for export from units located in a Special
Economic Zone (SEZ). A similar doubt has also been raised in respect of National
Calamity Contingent duty (NCCD) payable on specified excisable goods. The duties
in question are leviable under the following statutes:
(a) Additional Duty of Excise (Motor Spirit) under Section 111 of the Finance
(No. 2) Act, 1998 (21 of 1998);
(b) Additional Duty of Excise (High Speed Diesel) under section 133 of the
Finance Act, 1999 (27 of 1999);
(c) Special Additional Excise Duty on Motor Spirit and HSD under section 147 of
the Finance Act, 2002 (20 of 2002); and
(d) National Calamity Contingent Duty (NCCD) under section 136 of the Finance
Act, 2001 (14 of 2001).
2. The matter has been examined. Basic excise duty on goods produced or
manufactured in India is levied under section 3 of Central Excise Act, 1944 at
the rates set forth in the First Schedule to the Central Excise Tariff Act,
1985. However, goods produced or manufactured in SEZs have been excluded from
the purview of this section implying that this duty is not leviable to such
goods. Accordingly, excisable goods manufactured and cleared from units located
in SEZs whether for export or for home consumption do not attract this levy.
Moreover, section 7 of the Special Economic Zones Act, 2005 provides that any
goods exported out of a unit in a SEZ shall, subject to such terms, conditions
and limitations, as may be prescribed be exempt from the payment of taxes,
duties or cess under all enactments specified in the First Schedule. The First
Schedule enlists 21 such statutes including the Additional Duties of Excise
(Goods of Special Importance) Act, 1957 and the Additional Duties of Excise
(Textile and Textile Articles) Act, 1978. Thus, duties of excise or cesses
levied as duties of excise under these enactments are also not chargeable when
goods produced by an SEZ unit are exported. However, the relevant statutes/Acts
listed at (a) to (d) of para 1 above are neither specified in the First Schedule
of the SEZ Act, 2005 nor do they contain any exclusion for goods manufactured by
units in a SEZ. Under the circumstances, duties of excise leviable under these
statutes are chargeable to goods manufactured by SEZ units. However, it is
pertinent that the statutes referred to in para 1 above also provide that the
provisions of the Central Excise Act, 1944 and the rules made thereunder shall
apply to the levy and collection of these duties as they apply to the levy and
collection of excise duty under the Central Excise Act, 1944. The implication is
that the machinery provisions for the levy and collection of basic excise duty
have been borrowed for the purposes of the Additional Excise Duty, Special
Additional Excise Duty and NCCD. Among the machinery provisions of the Central
Excise Act and rules are the facilities for export of excisable goods under
claim for rebate (rule 18 of the Central Excise Rules) or the facility for
export under bond (rule 19). It is evident that owing to the enabling provision
these facilities would also be available to SEZ units manufacturing excisable
goods in respect of the duties specified in para 1 above.
3. In view of the above, it is clarified that AED or SAED levied on motor spirit
and high speed diesel under the respective sections of the Finance Acts and NCCD
on goods leviable to it, are not required to be paid for goods exported under
bond from a manufacturing unit located in a Special Economic Zone. Similarly, a
manufacturer located in a SEZ would be entitled to avail of the facility of
export under claim for rebate in terms of rule 18 of the Central Excise Rules in
respect of these duties. In both cases, the manufacturer would be required to
follow the procedure notified under these rules.
4. Trade and field formations may be informed accordingly.
5. Please acknowledge the receipt.
F.No.354/188/2008-TRUSd/-
(Vivek Johri)
Joint Secretary (TRU)
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