All Chief Commissioners of Customs & Central Excise
Sub: Rebate under Rule 18 on clearances made to SEZs. reg.
A few representations have been received from various field formations as well as from various units on the issue of admissibility of rebate on supply of goods by DTA units to SEZ.
2. A view has been put forth that rebate under Rule 18 of the central Excise Rules, 2002 read with Notification 19/2004- CE (NT) dated 06.09.2004 is admissible only when the goods are exported out of India and not when supplies are made to SEZ.
3. The matter has been examined. The circular No. 29/2006- Cus dated 27.12.2006 was issued after considering all the relevant points and it was clarified that rebate under Rule 18 is admissible when the supplies are made from DTA to SEZ. The Circular also lays down the procedure and the documentation for effecting supply of goods from DTA to SEZ, by modifying the procedure for normal export. Clearance of duty free material for authorised operation in the SEZ is admissible under Section 26 of the SEZ Act, 2005 and procedure under Rule 18 or Rule 19 of the Central Excise Rules is followed to give effect to this provision of the SEZ Act, as envisaged under Rule 30 of the SEZ Rules, 2006.
4. Therefore, it is viewed that the settled position that rebate under Rule 18 of the Central Excise Rules, 2002 is admissible for supplies made from DTA to SEZ does not warrant any change even if Rule 18 does not mention such supplies in clear terms. The field formations are required to follow the circular no. 29/2006 accordingly.