2013 (10) TMI 329 - AT - Central Excise

Clearance of Goods Exempted OR Not - Whether during the period November 2007 to December 2008 had cleared excisable goods to SEZ developer under bond / letter of undertaking without payment of duty, to be considered as exempted goods Held that - Following Sujana Metal Products vs. CCE 2011 (9) TMI 724 - CESTAT, BANGALORE - Supplies made to SEZ shall be treated as export - supplies made to SEZ are held to be export provisions of Rule 6 of CCR does not arise at all - The demand is of 10% of the value of the goods cleared by the appellant to SEZ developers and having not maintained separate accounts, is required to pay the amount as per the provisions of Rule 6(3) of the CENVAT Credit Rules, 2004 - As the issue has attained finality in the hands of High Court of Andhra Pradesh on an identical issue - the order is unsustainable and liable to be set aside Decided in favour of Assessee.

Summary

Issues:
Whether clearances of excisable goods to SEZ developer under bond without payment of duty are exempted goods.

Analysis:
The judgment dealt with two appeals raising a common issue regarding the classification of clearances of excisable goods to SEZ developers under bond without duty payment. The lower authorities had held that the appellants were liable to pay 10% of the value of the goods as they fell under the category of exemption. The learned counsel for the appellant referred to a Tribunal order in the case of Sujana Metal Products and a subsequent appeal by the Revenue before the High Court of Andhra Pradesh, which was dismissed, upholding the Tribunal's decision.

The Tribunal noted that the issue was undisputed regarding the demand for 10% of the value of goods cleared to SEZ developers due to the appellant's failure to maintain separate accounts, as required by Rule 6(3) of the CENVAT Credit Rules, 2004. Upon reviewing the Tribunal's decision in the case of Sujana Metal Products, the Bench found that the contentions raised by the counsel were correct and that the issue was conclusively settled by the High Court of Andhra Pradesh's judgment. As the issue had attained finality in the High Court on an identical matter decided by the Tribunal, the impugned order was deemed unsustainable and set aside. Consequently, the appeals were allowed, and the impugned order was overturned.

Overall, the judgment clarified the treatment of clearances of excisable goods to SEZ developers under bond without duty payment, emphasizing the importance of maintaining proper records as per the relevant rules. The decision was based on the precedent set by earlier Tribunal and High Court rulings, providing a clear legal interpretation on the matter.