2018 (9) TMI 10 - AT - Central Excise

CENVAT Credit - Clearance to SEZ Unit - inputs - denial of credit on the ground that the clearances to developer of SEZ is not covered under the provisions of Rule 6(6) of Cenvat Credit Rules 2004 - Held that - The issue is covered by the decision in the case of SUJANA METAL PRODUCTS LTD. VERSUS COMMISSIONER OF C. EX., HYDERABAD 2011 (9) TMI 724 - CESTAT, BANGALORE , where it was held that Exception provided under Rule 6(6) of Cenvat Credit Rules, 2004 shall be applicable to supply of exempted goods both to SEZ units and SEZ developers/promoters - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Determination of eligibility to avail cenvat credit on inputs used in the manufacture of finished goods cleared to a developer in SEZ.

Analysis:

Issue 1: Eligibility for Cenvat Credit
The appellant appealed against an order alleging they were not eligible to avail credit on inputs used in manufacturing goods cleared to a SEZ developer. The demand was confirmed with interest and penalty. The appellant argued that the issue is no longer res integara based on previous tribunal judgments. The AR for the Revenue agreed that the issue is covered by a specific tribunal judgment. The tribunal found that the limited issue was whether the appellants could avail cenvat credit on duty paid inputs used in manufacturing goods for a SEZ developer. Both sides acknowledged the issue was covered by a previous tribunal judgment. Consequently, the tribunal set aside the impugned order, allowing the appeals with any consequential relief as per the law.

This judgment clarifies the eligibility of availing cenvat credit on inputs used in the production of goods cleared to a SEZ developer. The decision was based on the interpretation of relevant provisions and previous tribunal judgments, providing guidance on the application of cenvat credit rules in such scenarios. The tribunal's analysis focused on the specific issue raised by the appellant, emphasizing the importance of consistency in applying legal principles established in previous cases. The decision ultimately favored the appellant, highlighting the significance of legal precedents and interpretations in resolving disputes related to cenvat credit eligibility for SEZ transactions.