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2015 (10) TMI 155 - AT - Central ExciseCenvat Credit - clearance of goods to SEZ unit - Notification No. 50/2008-CE (NT) dated 31/12/2008 - Held that - Amendment under Rule 6(6)(i) made on 31.12.2008 is clarificatory in nature and is applicable retrospective from the date when the 2004 Rules were implemented. Accordingly, the impugned orders are set aside - issue involved in the present case stands settled that the appellant is not required to pay 10% in terms of Rule 6 (3) (b) of Cenvat Credit Rules, 2004 therefore the demand confirmed by the original authority and upheld by the Commissioner (Appeals) is liable to be dropped. In view of discussion, the impugned order is not sustainable, hence the same is set aside - Decided in favour of assessee.
Issues:
- Interpretation of Cenvat Credit Rules regarding clearances to SEZ - Applicability of SEZ Act, 2005 on supplies made to SEZ - Retrospective effect of amendments in Cenvat Credit Rules Analysis: 1. Interpretation of Cenvat Credit Rules regarding clearances to SEZ: The case involved an appeal against an order rejecting the appellant's appeal regarding clearances of goods to an SEZ unit without payment of duty. The Revenue contended that the clearances did not fall under specific clauses of the Cenvat Credit Rules, resulting in a demand for duty, interest, and penalty. The Commissioner (Appeals) upheld this demand, citing an amendment made in the rules regarding clearances to SEZ units. However, the appellant argued that the SEZ Act, 2005 treated supplies to SEZ as exports, overriding subsequent amendments in the Cenvat Credit Rules. The Tribunal analyzed the submissions and relevant judgments to determine the nature of supplies to SEZ units and the impact of the rules' interpretation on such clearances. 2. Applicability of SEZ Act, 2005 on supplies made to SEZ: The Tribunal noted that the appellant supplied goods to an SEZ unit, which, as per the SEZ Act, 2005, were considered exports. This key point established that the goods supplied to SEZ units were treated as exports for all purposes. By referencing judgments like Union of India Vs. Steel Authority of India Ltd., the Tribunal emphasized that the SEZ Act's provisions took precedence, and the benefits of export should apply to supplies made to SEZ units, even before the specific rule amendment in the Cenvat Credit Rules. The Tribunal's analysis focused on the legal implications of treating SEZ supplies as exports and the impact on the demand raised by the Revenue. 3. Retrospective effect of amendments in Cenvat Credit Rules: Regarding the retrospective effect of amendments in the Cenvat Credit Rules, the Tribunal considered the judgments cited by both parties. While the Revenue argued against retrospective application, relying on cases like Indye Chemicals Vs. Collector of Central Excise, the appellant's counsel referenced cases like Ultratech Cement Ltd. Vs. Commissioner of Central Excise to support the clarificatory nature of the amendments. The Tribunal aligned with the view that the amendments were clarificatory and applicable retrospectively from the implementation of the rules. This analysis led to the conclusion that the appellant was not liable to pay the demanded amount under Rule 6(3)(b) of the Cenvat Credit Rules, ultimately setting aside the impugned order and allowing the appeal. In conclusion, the Tribunal's detailed analysis of the issues surrounding interpretations of the Cenvat Credit Rules, the impact of the SEZ Act on supplies to SEZ units, and the retrospective effect of rule amendments resulted in a favorable decision for the appellant, emphasizing the treatment of SEZ supplies as exports and the clarificatory nature of the rule amendments.
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