2022 (4) TMI 199 - AT - Central Excise

Denial of benefit of exemption under N/N. 42/2001-CE (NT) dated 26.06.2001 - denial of benefit on the ground that the N/N. 50/2008-CE (NT) dated 31.12.2008 introducing amendment that Rule 6 (6) of CCR 2004 would apply for clearances made to Developers of SEZ would apply only after 31.12.2008 - demand of 10% value of exempted goods cleared during the period 06.04.2006 to 19.06.2008 to Developers / Co-Developers in the SEZ along with interest and also for imposing penalties - HELD THAT - The very same issue has been considered by the Hon ble jurisdictional High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE CHENNAI II COMMISSIONERATE VERSUS M/S. S.P. FABRICATORS PVT LTD., THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL 2018 (10) TMI 1474 - MADRAS HIGH COURT has analysed the very same issue and held that amendment brought by way of Notification No.50/2008-CE (NT) dated 31.12.2008 is retrospective in operation. Thus, the demand cannot sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availing cenvat credit for payment of duty on final products.
2. Clearing excisable goods to SEZ units without payment of duty.
3. Applicability of Notification No.50/2008-CE (NT) dated 31.12.2008.
4. Interpretation of Rule 6 (6) of CCR 2004.
5. Retrospective application of the amendment.
6. Judicial analysis of the issue by the Hon'ble jurisdictional High Court.
7. Appeal against the Commissioner (Appeals) order.
8. Arguments regarding retrospective nature of the amendment.
9. Consideration of substantial questions of law framed.
10. Application of High Court decisions in similar cases.

Comprehensive Analysis:

1. The appellants availed cenvat credit for payment of duty on their final products, which were TMT bars falling under Chapter 72 of the CETA, 1985. They cleared excisable goods to SEZ units without payment of duty under Notification No.42/2001-CE (NT) dated 26.06.2001. The department contended that the benefit of the notification could not be availed for the period from April 2006 to June 2008 due to the introduction of an amendment through Notification No.50/2008-CE (NT) dated 31.12.2008.

2. The adjudicating authority initially dropped the proceedings, considering supplies from DTA to SEZ units or SEZ Developers as 'export' under the SEZ Act. However, the Commissioner (Appeals) allowed the Revenue's appeal, confirming the demand. The appellants then approached the Tribunal, challenging the Commissioner's order.

3. The appellant's counsel argued that the amendment introduced by Notification No.50/2008-CE (NT) should be considered retrospective based on a decision by the Hon'ble jurisdictional High Court in a similar case. The Tribunal considered the questions of law framed in the appeal, focusing on the retrospective nature of the amendment and the liability of the assessee for payment under Rule 6 (6) of the CENVAT Credit Rules.

4. The Tribunal referred to the High Court's decision in another case, emphasizing that the amendment of Notification No.50/2008-CE (NT) should apply retrospectively. The Tribunal relied on various precedents and disposed of the appeal in favor of the respondent/assessee, granting liberty to the Revenue for further action based on pending appeals.

5. After analyzing the facts and applying the decision of the Hon'ble jurisdictional High Court, the Tribunal concluded that the demand could not be sustained. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential relief as per law.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the case and the Tribunal's decision based on the arguments presented and legal precedents cited.