2016 (1) TMI 686 - AT - Central Excise

Supply made to the SEZ Developers - whether is an export and no duty is payable? - lower authority has rejected the claim only on the ground that Notification No. 50/2008 -CE (NT) dated 31-12-2008 is not retrospective, therefore supply made to the SEZ Developers cannot be export - Held that - The very same issue has been settled in various judgments cited by the Ld. counsel in particular, Hon ble Andhra Pradesh High Court also passed the judgment in the case of Sujana Metal Products Ltd. (2015 (3) TMI 781 - ANDHRA PRADESH HIGH COURT ). Thus it is of the considered view that supply made to the SEZ Developers is an export and no duty is payable. Therefore, the duty paid by the appellant is required to be refunded by the department to the appellant. - Decided in favour of assessee.

Summary

Issues:
Appeal against rejection of refund claim for duty paid on goods supplied to SEZ Developers treated as export.

Analysis:
The appeal challenged the Order-in-Appeal upholding the Order-in-Original that dismissed the appellant's appeal regarding the duty paid on goods supplied to SEZ Developers. The appellant treated the supply as export under ARE-1 but was later informed by the Jurisdictional Superintendent to pay duty and interest. The refund claim was rejected citing rule 6(6)(i) of Cenvat Credit Rules, 2004. The appellant contended that prior to Notification No. 50/2008, such supplies were considered export, referencing judgments like Sujana Metal Products Ltd. vs Commissioner of C.Ex., Hyderabad. The appellant argued that duty paid should be refunded along with interest.

The Commissioner (Appeals) rejected the appeal, emphasizing that the supply to SEZ Developers was not exempt from duty post the mentioned notification. However, the appellant relied on judgments like Siemens Ltd. vs Commr of C.Ex., Navi Mumbai and M/s. Dee Development Engineering Ltd. vs Commr of C.Ex., Faridabad to support their claim that the supply to SEZ Developers should be considered export, thus warranting a refund of the duty paid.

Upon review, the tribunal acknowledged that the supplies to SEZ Developers were made following export procedures. The tribunal noted that judgments, including the one by the Hon'ble Andhra Pradesh High Court in Sujana Metal Products Ltd., established that such supplies should be treated as exports. Consequently, the tribunal held that the duty paid should be refunded to the appellant. The impugned order was set aside, and the appeal was allowed, with directions for consequential relief as per the law.