2014 (8) TMI 432 - AT - Central Excise

Waiver of pre deposit - supply to SEZ unit - eligibility for Exemption Notification No.67/95-CE, dated 16.03.1995 - demand was raised on Clinker captively used in the manufacture of cement cleared to SEZ - Held that - It is the case of the appellants that the final product (cement) which was cleared to SEZ should be deemed to have been exported from the country and, therefore, the proviso to the above Notification cannot be pressed into service for demanding duty on clinker (input) contained in the final product. In this connection, the counsel has referred to the relevant provisions of the SEZ Act, 2005. It appears that the statute deems SEZs to be territories lying outside domestic tariff area. If that be the case, the clearance of cement by the appellants to SEZ was to be reckoned as export in which event this product cannot fall in the category of goods exempt from the whole of duty of excise leviable thereon or are chargeable to Nil rate of duty . Only those inputs which are used in or in relation to the manufacture of the final products coming within the scope of this expression would be covered by the above proviso. In other words, prima facie, the proviso to the above Notification is not attracted and consequently the appellants can legitimately claim the benefit of exemption from payment of duty on clinker in terms of the Notification - Following decision of assessee s own previous case - Stay granted.

Summary

Issues:
1. Demand raised on clinker captively used in the manufacture of cement cleared to SEZ.
2. Eligibility for Exemption Notification No.67/95-CE, dated 16.03.1995.
3. Tribunal's previous decision granting unconditional stay in a similar case.
4. Commissioner (Appeals) setting aside the adjudication order in a different unit on the same issue.

Analysis:
1. The judgment addresses the demand raised on clinker used in cement production cleared to SEZ without duty payment. The demand amounted to &8377; 10,46,607/- with additional interest and penalty of &8377; 1 lakh for the period between February 2008 to August 2008. The issue revolved around the eligibility of clinker for Exemption Notification No.67/95-CE, dated 16.03.1995.

2. The Tribunal referred to a previous decision in the applicant's case where an unconditional stay was granted on a similar issue. The Tribunal noted that in the previous case, the demand was on clinker contained in cement cleared to SEZ, and the appellants argued that the final product should be deemed as exported due to SEZ Act, 2005 provisions. Consequently, the Tribunal found that the proviso to the Notification was not applicable, allowing the benefit of exemption from duty on clinker.

3. The judgment also highlighted that the Commissioner (Appeals) had set aside the adjudication order in the applicant's other unit on the same issue. Considering these precedents, the Tribunal decided to waive the pre-deposit of duty, interest, and penalty until the appeal's disposal, following the earlier decision of granting stay based on similar circumstances.

4. In conclusion, the Tribunal granted the stay application based on the previous decision and the Commissioner (Appeals) setting aside the adjudication order in a different unit. The waiver of pre-deposit of duty, interest, and penalty was allowed until the appeal's final disposal, aligning with the principles established in the earlier cases.