2012 (9) TMI 420 - AT - Central Excise

Non reversal of the amount of 10% of the value of the exempted goods send to an SEZ developer - Held that - As decided in SUJAKO INTERIORS PVT. LTD. Versus COMMR. OF CENTRAL EXCISE, AHMEDABAD 2011 (2) TMI 624 - CESTAT, AHMEDABAD the supplies made by the appellant to SEZ developers were to be treated as deemed exports and the provisions of Rule 6(3) of the Cenvat Credit Rules requiring the appellant to pay an amount of equal to 10% of the value of exempted final product are not applicable - in favour of assessee.

Summary

Issues involved:
- Stay petition for waiver of pre-deposit of an amount
- Liability for payment of duty on goods cleared to SEZ developers without discharging duty liability

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad involved a stay petition filed for the waiver of pre-deposit of an amount along with interest and penalty. The amounts in question were confirmed by the adjudicating authority and upheld by the first appellate authority as payable on the value of exempted goods cleared by the appellant to SEZ developers. The authorities imposed penalties due to the appellant not maintaining separate records for common inputs/input services. The issue revolved around the clearance of finished goods to an SEZ developer without discharging the duty liability and clearing the goods under bond/LUT. Both lower authorities held the appellant liable to reverse 10% of the value of exempted goods for not keeping separate records. However, the appellant argued that finished goods cleared to SEZ developers should not be considered exempted goods, citing precedents like the case of Sujana Metal Products Ltd. The Tribunal agreed with the appellant, stating that the impugned order was unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed.