2011 (10) TMI 198 - AT - Central Excise

DTA supplied goods to SEZ - Revenue demanded 10% of value of the exempted goods supplied to SEZ - Held - In view of Section 51 of the SEZ Act, the supplies made by DTA units to SEZ units will amount to export for the purpose of all export benefits. The benefit shall include benefits available in respect of exports provided by exception to Rule 6 of Cenvat Credit Rules, 2004.Thus appeal of revenue was turned down.

Summary

Issues involved:
- Interpretation of Rule 6 of CENVAT Credit Rules 2004 regarding supplies made to SEZ developers/promoters.
- Whether supplies made to SEZ units should be treated as exports.
- Applicability of SEZ provisions under Customs Act, SEZ Act, and Central Excise Rules.

Analysis:
1. Interpretation of Rule 6 of CENVAT Credit Rules 2004: The appeals involved the question of whether Rule 6 of the CENVAT Credit Rules 2004 applied to supplies made to SEZ developers/promoters. The Tribunal considered that when exempted goods are supplied to SEZ units, exceptions under Rule 6(5) and Rule 6(6) of the Rules would apply. The key issue was determining the status of goods supplied to SEZ units as either "goods exported" or otherwise, impacting their treatment as "dutiable goods" or "exempted goods."

2. Treatment of supplies to SEZ units as exports: The Tribunal analyzed the SEZ provisions in the Customs Act, noting that goods admitted to SEZ were treated as exports for various purposes, including levying export duties. It was established that supplies made by DTA units to SEZ units amounted to exports, entitling them to export benefits and exceptions under Rule 6 of CENVAT Credit Rules 2004.

3. Applicability of SEZ provisions: Considering the SEZ provisions under the Customs Act, SEZ Act, and Central Excise Rules, the Tribunal concluded that supplies to SEZ units should be treated as exports, both before and after a specific date. The Tribunal clarified that the amendment to Rule 6(1) of CENVAT Credit Rules 2004 applied retrospectively, providing exceptions for supplies of exempted goods to SEZ units and developers/promoters.

4. Decision and Consequential Relief: Based on the interpretation of Rule 6 and the treatment of supplies to SEZ units as exports, the Tribunal allowed the appeals of the assessees, setting aside the Commissioner's orders and providing consequential relief. The appeals of the department were rejected, as the Tribunal found no reason to interfere with the orders of the Commissioner (Appeals) in the other cases.

This comprehensive analysis of the judgment highlights the key legal issues, interpretations, and conclusions reached by the Tribunal regarding the applicability of Rule 6 of CENVAT Credit Rules 2004 to supplies made to SEZ developers/promoters and the treatment of such supplies as exports under relevant SEZ provisions.