2014 (12) TMI 582 - AT - Central Excise

Waiver of pre deposit - Denial of CENVAT Credit - Goods supplied to SEZ developers - Held that - There are contrary/conflicting decisions of this Tribunal on the matter. While in the Sujako Interiors Pvt. Ltd. case 2011 (2) TMI 624 - CESTAT, AHMEDABAD it has been held that the benefit of credit would be available in respect of supplies made to SEZ developers even for the period prior to 31/12/2008, a contrary view has been taken by this Tribunal in Blue Star Ltd. case 2011 (3) TMI 1287 - CESTAT, MUMBAI . In view of the contrary decisions, the appellants are entitled to grant of stay. Accordingly, we grant waiver from pre-deposit of dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal - Stay granted.

Summary

Issues:
1. Eligibility of Cenvat Credit on input services used in the manufacture of goods supplied to SEZ developers prior to 31/12/2008.
2. Reversal of 10% of the value of goods supplied to SEZ developers as exempted goods.

Analysis:

Issue 1: Eligibility of Cenvat Credit
The appeal challenged an order-in-appeal that disallowed Cenvat Credit on input services for goods supplied to SEZ developers before 31/12/2008. The appellant argued citing precedents like Sujako Interiors Pvt. Ltd. and Aurobindo Pharma Ltd. that favored granting the credit even for pre-31/12/2008 supplies. On the other hand, the Revenue, represented by the Ld. Additional Commissioner, relied on the decision in Blue Star Ltd. case, stating that the benefit of credit was not available for supplies made before the amendment on 31/12/2008. The Tribunal noted conflicting decisions, with Sujako Interiors Pvt. Ltd. allowing the credit and Blue Star Ltd. case denying it. Due to this inconsistency, the Tribunal granted waiver from pre-deposit of dues and stayed recovery during the appeal, indicating that the appellants were entitled to the stay.

Issue 2: Reversal of 10% of the Value
The impugned order required the appellants to reverse 10% of the value of goods supplied to SEZ developers as exempted goods due to the disallowed Cenvat Credit. The appellant contested this requirement, seeking relief based on the settled precedents. The Tribunal did not provide a direct ruling on this issue in the judgment but focused on the eligibility of Cenvat Credit for pre-31/12/2008 supplies. Therefore, the specific issue of reversing 10% of the value was not explicitly addressed in the judgment.

In conclusion, the judgment primarily dealt with the eligibility of Cenvat Credit on input services for goods supplied to SEZ developers before 31/12/2008, highlighting conflicting decisions and granting a stay on recovery during the appeal process. The issue of reversing 10% of the value of goods supplied was not directly resolved in the judgment.