2013 (11) TMI 327 - AT - Central Excise

Supplies to SEZ from DTA Waiver of Pre-deposit of Duty and Penalty u/s 11AC - Clearance to be treated as dutiable goods or exempted goods - Held that - Following Sujana Metal Products Ltd. vs. CCE, Hyderabad 2011 (9) TMI 724 - CESTAT, BANGALORE - The definition of the term export under the SEZ Act shall prevail over the definition of term export under the Customs Act - supplies made to SEZ from DTA units shall be treated as export - supplies made to SEZ are held to be export provisions of Rule 6 of CCR does not arise at all - 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 - the applicant has made out a prima facie case for total waiver of pre-deposit of dues - all dues waived and its recovery stayed during pendency of the Appeal stay granted.

Summary

Issues: Application for waiver of pre-deposit of duty and penalty under Section 11AC of the Central Excise Act, 1944.

Analysis:
1. The appellant sought waiver of pre-deposit of duty amounting to Rs.6.88 Crores and an equal penalty imposed under Section 11AC of the Central Excise Act, 1944.
2. The advocate for the appellant argued that the department alleged that clearances to S.E.Z. developers were not exports covered under Rule 6(6) of Cenvat Credit Rules, 2004, requiring payment of 10% of the goods' price. The advocate cited precedents, including the case of Sujana Metal Products Ltd. vs. CCE, Hyderabad and the judgment of the Hon'ble High Court of Chhattisgarh in the case of Union of India vs. Steel Authority of India Ltd., to support their case.
3. The Assistant Commissioner (A.R.) reiterated the findings of the Commissioner.
4. The Tribunal noted that the issue was previously decided in the case of Sujana Metal Products and by the High Court of Chhattisgarh in the case of Steel Authority of India Ltd. Consequently, the Tribunal found that the appellant had established a prima facie case for a total waiver of the dues adjudged. As a result, all dues were waived, and recovery was stayed during the pendency of the appeal. The stay petition was allowed.

This judgment by the Appellate Tribunal CESTAT KOLKATA involved an application for the waiver of pre-deposit of duty and penalty under the Central Excise Act, 1944. The appellant argued that the clearances to S.E.Z. developers should be considered exports under Rule 6(6) of Cenvat Credit Rules, citing relevant precedents. The Tribunal, considering the precedents cited, granted a total waiver of the dues adjudged and stayed the recovery during the appeal process.