2013 (7) TMI 756 - AT - Central Excise

Rule 6 of the Cenvat Credit Rules,2004 Clearance of goods to SEZ - The date since when the clarificatory rule 6 of CCR,2004 is applicable - Appellant had cleared finished goods i.e. cement to units who are functioning as developers and Special Economic Zone without payment of duty as reported under Section 26 of the Special Economic Zone 2005 - Appellant should have reversed the cenvat credit availed on the manufacturing of such final products or in the alternative, should have paid 10% of the value of the cement cleared without payment of duty to Special Economic Zone or Special Economic Zone developers Held that - As per the judgment in the case of Sujana Metal Products Ltd. & Ors. Vs. CCE Hyderabad 2011 (9) TMI 724 - CESTAT, BANGALORE , any inputs and the services cleared to Special Economic Zone or Special Economic Zone developers up to 31.12.08 is to be considered as cleared to the developers and not only to Special Economic Zone units and subsequent amendment in Rule 6(6) has to be considered as clarificatory in nature - The substituted sub-rule 6(6Xi) is enforced from the date the 2004-Rules came into force Appeal allowed - Decided in favor of Assessee

Summary

Issues:
Payment of 10% amount on exempted goods cleared to Special Economic Zone developers.

Analysis:
The appeal was against an order related to the clearance of finished goods, specifically cement, to developers and Special Economic Zones without payment of duty. The lower authorities believed that the appellant should have either reversed the cenvat credit or paid 10% of the value of the cement cleared without duty to the Special Economic Zone developers. The issue revolved around the interpretation of rules regarding the clearance of exempted goods to Special Economic Zone developers up to a certain date. The Tribunal noted that a similar issue had been previously decided in the case of Sujana Metal Products Ltd. & Ors. vs. CCE Hyderabad, where it was held that supplies to Special Economic Zones should be treated as exports, impacting the application of Cenvat Credit Rules. The Tribunal further referenced a judgment by the High Court of Chattisgarh, which supported the clarificatory nature of the amendments to the rules. The Tribunal concluded that the issue was settled in favor of the assessee based on previous judgments and held that the impugned order was unsustainable, setting it aside and allowing the appeal.

In summary, the judgment focused on the interpretation of rules regarding the payment of 10% amount on exempted goods cleared to Special Economic Zone developers. The Tribunal relied on previous decisions and held that supplies to Special Economic Zones should be treated as exports, impacting the application of Cenvat Credit Rules. The judgment emphasized the clarificatory nature of the rule amendments and concluded in favor of the assessee, setting aside the impugned order and allowing the appeal.