2008 (10) TMI 466 - AT - Central Excise

Summary

Issues involved: Interpretation of Notification No. 67/95-C.E. u/s SEZ Act, 2005 for duty on clinker in cement cleared to SEZ.

Summary:

1. Duty demand on clinker in cement cleared to SEZ:
The Appellate Tribunal noted that the ld. Commissioner demanded duty of over Rs. 55 lakhs from the appellants on clinker contained in cement cleared to a Special Economic Zone (SEZ) during a specific period. The demand was based on the denial of the benefit of Notification No. 67/95-C.E. The appellants argued that since the final product (cement) cleared to SEZ should be deemed as exported, the proviso to the Notification should not apply to demand duty on clinker, which is an input. The counsel referred to the SEZ Act, 2005, which deems SEZs as territories outside the domestic tariff area. Therefore, the clearance of cement to SEZ should be considered as 'export,' making the clinker not liable for duty under the said Notification. The Tribunal prima facie found that the proviso to the Notification may not be applicable, allowing the appellants to claim exemption from duty on clinker.

2. Waiver of pre-deposit and stay of recovery:
The Tribunal found that the appellants have made out a prima facie case against the dues adjudged against them. Consequently, the Tribunal ordered a waiver of pre-deposit and stay of recovery concerning the duty and penalty amounts.

*(Dictated and pronounced in open court)*