2018 (8) TMI 891 - HC - Central Excise

Retrospective effect of Amendment of Rule 6(6)(i) of Cenvat Credit Rules, 2004 - goods cleared to a developer of a Special Economic Zone for their authorized operation - Held that - The Chennai Bench of the Tribunal in the case of S.P. Fabricators Pvt. Ltd. Vs. Commissioner of Customs, Chennai-II 2015 (3) TMI 955 - CESTAT CHENNAI has held that the goods supplied to SEZ Developers are to be treated as exports under Section 2(m) of SEZ Act and that the amendment introduced in Rule 6(6) on 31.12.2008 is retrospective in nature. The controversy involved in the present case is covered by the decision of the cognate bench of this Court - no Substantial Question of Law arises for consideration and the appeal is liable to be dismissed - appeal dismissed.

Summary

Issues:
Interpretation of Rule 6(6)(i) of Cenvat Credit Rules, 2004 in relation to goods cleared to a developer of a Special Economic Zone for their authorized operation.

Analysis:
The judgment in question dealt with the interpretation of Rule 6(6)(i) of the Cenvat Credit Rules, 2004 in the context of goods cleared to a developer of a Special Economic Zone (SEZ) for their authorized operation. The court referred to the Special Economic Zones Act, 2005, which declares SEZs as territories outside the Customs territory of India for undertaking authorized operations. The definition of "export" under the Act includes supplying goods to a unit or developer within the Domestic Tariff Area. The court emphasized that exports to developers were exempt from central excise duty under the SEZ Act, and the Cenvat Credit Rules were applicable accordingly. The judgment highlighted the importance of Section 151 of the SEZ Act, which supersedes conflicting provisions in other laws. The court noted that prior to the 2008 amendment, the word "developer" was missing in Rule 6(6)(i), leading to ambiguity. The court considered the 2008 amendment clarificatory in nature, extending the benefit of Rule 6(6)(i) to developers of SEZs for their authorized operations. This interpretation was supported by a circular issued by the Central Board of Excise and Customs. Consequently, the court dismissed the appeal, ruling in favor of the assessees and against the Revenue.

The Tribunal's decision in the present case, based on the aforementioned judgment, granted relief to the respondent-assessee. The Tribunal cited previous judgments by the Karnataka High Court and different benches of the Tribunal, emphasizing the retrospective nature of the 2008 amendment to Rule 6(6)(i). These judgments highlighted that goods supplied to SEZ developers should be treated as exports under the SEZ Act, entitling developers to benefits similar to those given to exporters under other laws. The Tribunal concluded that the controversy in the present case aligned with the decisions referenced, leading to the dismissal of the appeal. The Tribunal's decision reiterated the retrospective application of the 2008 amendment and the extension of benefits to SEZ developers for their authorized operations.