2017 (7) TMI 1072 - AT - Central Excise

Levy of excise duty - goods cleared to SEZ developer - whether the appellant is required to discharge the Central Excise duty on the inputs which were consumed for manufacture of goods cleared to SEZ unit developers by availing exemption under N/N. 50/2008? - Held that - the issue is squarely settled by the Hon ble High Court of Karnataka in the case of Fosroc Chemicals (India) Pvt. Ltd. 2014 (9) TMI 633 - KARNATAKA HIGH COURT where it was held that clearances made to SEZ unit developers are equal clearances made to SEZ units and there is no need for reversal of 10% of the value - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Whether the appellant is required to discharge Central Excise duty on inputs consumed for goods cleared to SEZ unit developers under an exemption notification.

Analysis:

The judgment by the Appellate Tribunal CESTAT Bangalore revolved around the issue of whether the appellant was obligated to pay Central Excise duty on inputs utilized for manufacturing goods cleared to SEZ unit developers while availing an exemption under notification No.50/2008. The Tribunal considered the submissions and records presented by both parties and referred to the decision of the Hon'ble High Court of Karnataka in the case of Fosroc Chemicals (India) Pvt. Ltd. The Revenue contended that upon claiming the exemption, the appellant should reverse 10% of the value of goods cleared to SEZ unit developers. However, the Tribunal noted that the issue had been conclusively settled by the High Court in previous cases such as Fosroc Chemicals (India) Pvt. Ltd. and Sujana Metal Products Ltd. In those cases, it was established that clearances to SEZ unit developers were equivalent to clearances made to SEZ units, eliminating the necessity for the 10% value reversal. Consequently, the Tribunal set aside the impugned order and allowed the appeal, aligning with the precedents established by the High Court.

This judgment underscores the importance of legal precedence and the application of established rulings in resolving similar disputes. It showcases the significance of judicial decisions in providing clarity on contentious issues within the realm of taxation and exemptions. The Tribunal's reliance on previous High Court judgments highlights the role of higher courts in guiding lower tribunals and ensuring consistency and uniformity in legal interpretations. The case serves as a reminder of the legal principles governing exemptions and duty obligations, emphasizing the need for adherence to established legal doctrines in addressing complex legal issues.