2013 (11) TMI 1183 - AT - Central Excise

Goods cleared without payment of duty - Waiver of Pre-deposit Held that - The cement is cleared to the contractors - There is no name of developer of co-developer mentioned in the documents - Prima facie applicant had not made out a case for total waiver of duty as the documents under which cement was cleared, has no reference of developers - applicants directed to deposit an amount equal to 25% of duty as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues: Waiver of pre-deposit of duty, clearance of cement without payment of duty, goods cleared to SEZ developers, interpretation of SEZ developers Rules, 2005.

In this judgment by the Appellate Tribunal CESTAT MUMBAI, the applicant filed applications seeking waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 23,72,642 and Rs. 13,70,450 in separate appeals. The demand was confirmed due to the clearance of cement without payment of duty. The applicant argued that the cement was cleared to the contractor of the SEZ developers, thus not liable to duty based on a Tribunal decision. The Revenue contended that the goods were cleared to the contractor, not the SEZ developers, citing provisions of the Special Economic Zone Act, 2005. The Act allowed exemptions to contractors appointed by developers or co-developers, provided documents bear the names of developers or co-developers along with contractors. As the documents in this case did not mention developers, the demand was upheld by the Revenue.

Upon examination, it was found that the cement was indeed cleared to the contractors, not directly to the SEZ developers. While the applicant argued that the ultimate clearance was to the SEZ developers through contractors, the SEZ developers Rules, 2005 were reviewed. Rule 10 stipulated that benefits to contractors are subject to documents bearing the names of developers or co-developers. As the documents lacked such references, the Tribunal found the applicant had not sufficiently proven a case for total waiver of duty. However, considering the circumstances, the Tribunal directed the applicant to deposit 25% of the confirmed duty amount in each case within eight weeks. Upon this deposit, the pre-deposit of the remaining dues was waived, and recovery stayed during the appeal's pendency. Compliance was to be reported by a specified date.