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2018 (7) TMI 1592 - AT - Central ExciseCENVAT Credit - clearance to SEZ Developers - inputs used in manufacture of taxable as well as exempted goods cleared to such SEZ developers and promoters - non-maintenance of separate records - Held that - There is no dispute as to the fact that clearances effected by the appellant to SEZ developers and promoters are after claiming the benefit of non-payment of duty during the period December, 2007 to July, 2008 - An identical issue was before the Tribunal, one of the appellant s sister concerns Sujana Metal Products Ltd. 2011 (9) TMI 724 - CESTAT, BANGALORE , wherein, it was held that clearances made to SEZ developers and promoters are nothing but clearances made to SEZ developers and after the SEZ act came to existence on invoking the provision of CENVAT Credit Rules, 6(6) 2004 as the goods which are developers are export of dutiable goods. Appeal allowed - decided in favor of appellant.
Issues:
1. Duty payment on clearances of finished goods to SEZ developers and promoters without payment of duty. 2. Availment of CENVAT credit on inputs utilized in the manufacture of finished goods. 3. Maintenance of separate accounts for clearances to SEZ developers and promoters. 4. Applicability of Rule 6 of CENVAT Credit Rules, 2004 to clearances to SEZ developers and promoters. 5. Interpretation of clearances to SEZ developers and promoters as exports. Analysis: The appeal was against an Order-in-Original concerning the clearance of finished goods to SEZ developers and promoters without duty payment. The Revenue alleged that since the appellant cleared goods without duty payment and availed CENVAT credit on inputs without separate accounts, they were liable to pay 10% of the value of exempted goods cleared. The issue was whether clearances to SEZ developers and promoters could be equated to goods cleared to SEZ units and the applicability of Rule 6 of CENVAT Credit Rules, 2004. The appellant argued that clearances to SEZ developers and promoters were akin to clearances to SEZ units post the SEZ act, supported by a Tribunal case and a High Court decision. The Departmental Representative contended that the impugned order was correct, and the amendment rules applied from December 2007. The Tribunal noted that the appellant's clearances were after claiming non-payment of duty and cited a previous case where clearances to SEZ were considered exports, thus exempt from CENVAT Credit Rules. The Tribunal referred to the provisions of CENVAT Credit Rules and the SEZ act, stating that the supplies to SEZ were deemed exports, making Rule 6 of CENVAT Credit Rules inapplicable. The Tribunal also highlighted an amendment to Rule 6(1) of CCR, 2004, which was applicable from the inception of CCR, 2004. The High Court of Andhra Pradesh had previously upheld a similar decision in favor of the assessee. Consequently, the Tribunal set aside the impugned order and allowed the appeal, following the precedent and the High Court's decision. In conclusion, the Tribunal ruled in favor of the appellant, holding that the clearances to SEZ developers and promoters were equivalent to clearances to SEZ units, treated as exports, and exempt from the provisions of CENVAT Credit Rules. The decision was based on legal interpretations, precedents, and the applicability of relevant rules and acts.
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