2017 (8) TMI 1464 - HC - Central Excise

Clearance to S.E.Z. developers - whether the clearance to S.E.Z. developers during the period June, 2008 to November, 2008 would be exempted goods in view of Rule 6(6)(i) of the Cenvat Credit Rules, 2004 which substituted the earlier provision on 31st December, 2008, even to clearances prior to 31st December, 2008? Held that - The question arising is essentially a question relating to duty of excise on the goods cleared to developer of S.E.Z. prior to 31st December, 2008 i.e. exempted or not under Rule 6(6)(i) of the Cenvat Credit Rules - there is no jurisdiction to entertain the present appeal in view of Section 35L of the Act. The substantial question as formulated is not being answered for want of jurisdiction - appeal dismissed.

Summary

Issues: Jurisdiction of the Court to entertain appeal under Section 35G(1) of the Central Excise Act, 1944 regarding retrospective effect of an amendment to Rule 6(6)(i) of the Cenvat Credit Rules, 2004 on duty payable for clearances to S.E.Z. Developers.

Analysis:

1. Jurisdiction of the Court: The appeal challenged an order passed by the Customs, Excise & Service Tax Appellate Tribunal (Tribunal) under Section 35G(1) of the Central Excise Act, 1944. The substantial question of law raised was whether an amendment to Rule 6(6)(i) of the Cenvat Credit Rules, 2004 had retrospective effect on duty payable for clearances to S.E.Z. Developers. The appellant contended that the issue related to the rate of duty payable on goods cleared to developers of special economic zones before 31st December, 2008, falling under the jurisdiction of the Supreme Court as per Section 35L of the Act.

2. Background and Show Cause Notice: The Joint Commissioner of Central Excise issued a notice seeking to recover an amount from the assessee for goods cleared to the developer of SEZ during June 2008 to November 2008. The demand was based on Rule 6(3) of the Cenvat Credit Rules, 2004, requiring payment of 10% amount on the clearance of exempted goods where Cenvat Credit was availed on inputs used in such goods. The Additional Commissioner confirmed the demand, leading to an appeal by the assessee to the Commissioner (Appeals).

3. Appeals and Tribunal Decision: The assessee contended that an amendment to Rule 6(6)(i) by Notification dated 31st December, 2008 excluded the application of Rule 6(3) to clearances to SEZ developers and had retrospective effect. However, the Commissioner (Appeals) upheld the demand, prompting the assessee to appeal to the Tribunal. The Tribunal held that the amendment made the clearances to SEZ developers exempted goods, not subject to Rule 6(3).

4. High Court Decision: The High Court noted that the core issue was whether clearances to SEZ developers before 31st December, 2008 would be exempted goods under Rule 6(6)(i) of the Cenvat Credit Rules, 2004. As this question related to the duty of excise on goods cleared to SEZ developers before the specified date, the Court lacked jurisdiction to entertain the appeal under Section 35L of the Act. Consequently, the appeal was dismissed, and no costs were awarded.

In conclusion, the High Court dismissed the appeal due to lack of jurisdiction, as the issue concerning the retrospective effect of an amendment to the Cenvat Credit Rules on duty payable for clearances to SEZ developers fell under the purview of the Supreme Court as per the Act.