2011 (9) TMI 433 - AT - Central Excise

Goods removed from DTA to SEZ - Export - Cenvat credit - Rule 6(3) of CCR 2004 not applicable (M/s. Sujana Metal Products Ltd. Vs. CCE (2011 -TMI - 208174 - CESTAT, BANGALORE)).

Summary

Issues:
1. Whether demand could be raised on the respondent under Rule 6(3) of the CENVAT Credit Rules 2004 for supplying finished goods to SEZ units without maintaining separate accounts.
2. Whether clearances made by the respondent to SEZ developers should be treated as exports under the Customs Act, thereby exempting them from the provisions of Rule 6 of the CENVAT Credit Rules 2004.

Analysis:
1. The main issue in this appeal is whether the respondent can be demanded under Rule 6(3) of the CENVAT Credit Rules 2004 for supplying finished goods to SEZ units without maintaining separate accounts for dutiable and exempted goods. The Tribunal referred to a previous case, M/s. Sujana Metal Products Ltd. Vs. CCE, Hyderabad, where it was held that supplies to SEZ from DTA units are to be treated as exports, making Rule 6(3) inapplicable to such goods. Therefore, the demand raised on the respondent was not sustainable under the law.

2. The original authority had imposed a demand and penalty on the respondent for clearances made to SEZ developers. However, the Commissioner (Appeals) set aside both demands, considering the clearances as exports under the Customs Act. This decision aligns with the precedent set in M/s. Sujana Metal Products Ltd. Vs. CCE, Hyderabad, leading to the dismissal of the Revenue's appeal. The Tribunal upheld the view that clearances to SEZ developers should be treated as exports, thereby exempting them from the provisions of Rule 6 of the CENVAT Credit Rules 2004.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the decision of the Commissioner (Appeals) that clearances made by the respondent to SEZ developers should be treated as exports, and hence not subjected to the demands under Rule 6 of the CENVAT Credit Rules 2004. The judgment relied on established legal precedents to support the decision, providing clarity on the treatment of supplies to SEZ units and the applicability of relevant rules and regulations.