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2022 (4) TMI 131 - AT - Central ExciseRecovery of CENVAT Credit - demand was made on the ground that the appellants are supplying excisable goods to SEZ developer, which is exempted under the Notification No.4/2004-ST and the appellant is required to reverse 10% of the value of the exempted excisable goods, in terms of Rule 6 of CENVAT Credit Rules, 2004 - HELD THAT - From the amendment by Section 144 of the Finance Act, 2012, it is settled that the appellants are not required to pay any amount under Rule 6 in respect of supplies made to SEZ Developers, the appellant is not required to pay any amount in terms of Rule 6 of CENVAT Credit Rules, 2004. Also, reliance can be placed in the case of SAINT-GOBAIN GYPROC INDIA LTD VERSUS COMMISSIONER OF CENTRAL EXCISE THANE I 2019 (2) TMI 1557 - CESTAT MUMBAI where it was held that notwithstanding a subsequent amendment in rule 6(6) to the CENVAT Credit Rules, 2004, to include developer of special economic zones within the escapement covered of rule 6 of the said Rules, the categorization as exports would itself suffice to exclude the applicability of the liability prescribed therein. Accordingly, demand of ₹ 1,97,01,669/- and corresponding interest and penalty are not sustainable - appeal allowed - decided in favor of appellant.
Issues:
Appeal against demand of ?1,97,01,669 for goods cleared to SEZ Developers under CENVAT Credit Rules, 2004 and Section 11A of Central Excise Act, 1944. Analysis: 1. Issue of Demand Confirmation: The appeal challenged the Order-in-Original confirming a demand of ?1,97,01,669 for supplying excisable goods to SEZ Developers under Rule 14 of CENVAT Credit Rules, 2004. The appellant argued that a retrospective amendment in the Finance Act, 2012 exempted such supplies from the provisions of Rule 6 of CENVAT Credit Rules, 2004. The Tribunal considered the amendment under Section 144 of the Finance Act, 2012, which deemed Rule 6 to have been amended retrospectively from 10.02.2006. The Tribunal noted that the amendment absolved the appellant from the requirement to make payments under sub-rules (1), (2), (3), and (4) of Rule 6 for supplies to SEZ Developers. 2. Legal Interpretation and Precedents: The Tribunal referred to the judgment in the case of Saint Gobian Gyproc India Ltd. vs. CCE, Thane-I and Sujana Metal Products Ltd. vs. CCE, Bangalore to support the appellant's contention. These judgments emphasized that supplies to SEZ Developers are treated as exports, thereby excluding the applicability of Rule 6 of CENVAT Credit Rules, 2004. The Tribunal highlighted that the SEZ Act mandates that its provisions prevail over any conflicting statutes, further reinforcing the exemption for supplies to SEZ Developers. 3. Effect of Retrospective Amendment: The retrospective effect of the amendment, as per Section 144 of the Finance Act, 2012, was crucial in determining the appellant's liability. The Tribunal concluded that the appellant was not required to pay any amount under Rule 6 for supplies made to SEZ Developers. This decision was based on the combined effect of the legal amendments and established legal precedents, which clarified the treatment of supplies to SEZ Developers as exports, thereby exempting them from Rule 6 obligations. 4. Final Decision and Disposition: In light of the retrospective amendment and legal interpretations, the Tribunal set aside the demand of ?1,97,01,669 along with corresponding interest and penalty. The impugned order was overturned, and the appeal was allowed in favor of the appellant. The Tribunal's detailed analysis and reliance on legal provisions and precedents ensured a just and legally sound decision in favor of the appellant, highlighting the importance of legal clarity and consistency in tax matters related to SEZ supplies. (Order pronounced in the Open Court on 01/04/2022.)
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