2017 (11) TMI 1239 - AT - Central Excise

Benefit of N/N. 67/95-CE dated 16.3.1995 - whether the appellants are eligible for exemption under Notification No. 67/95-CE dated 16.3.1995 on clinker used captively in the production of cement cleared without payment of duty to units at Special Economic Zone? - Held that - the issue is squarely covered in favour of the assessee by the decision of the Tribunal in the case of Ultratech Cement Ltd. 2015 (10) TMI 1058 - CESTAT CHENNAI , where it was held that clinkers used captively for manufacture of cement cleared to SEZ is covered under Notification 67/95 from exemption of excise duty - the appellants are eligible for exemption under N/N. 67/95 on clinker used captively in the production of cement cleared without payment of duty to units at Special Economic Zone - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellants are eligible for exemption under Notification No. 67/95-CE dated 16.3.1995 on clinker used captively in the production of cement cleared without payment of duty to units at Special Economic Zone.

Analysis:
The case involved the appellants, who are manufacturers of cement and clinker, clearing cement to units in a Special Economic Zone (SEZ) without payment of duty under Rule 30 of the Special Economic Zone Rules, 2006. The issue revolved around the eligibility of the appellants for exemption under Notification 67/95-CE dated 16.3.1995. Show cause notices were issued proposing to demand duty, interest, and penalties for the period from July 2006 to March 2007. The original authority and the Commissioner (Appeals) held that the appellants were not eligible for the benefit of the notification, leading to the appeal before the Tribunal.

The appellant's counsel argued that the issue was already decided in favor of the appellant by a previous decision of the Tribunal in the case of Ultratech Cements Ltd. vs. Commissioner of Central Excise, Trichy. The counsel contended that the demand was unsustainable and requested setting aside the order. On the other hand, the learned Assistant Commissioner reiterated the findings in the impugned order.

After hearing both sides, the Tribunal analyzed the issue and referred to the decision in the Ultratech Cement Ltd. case. The Tribunal highlighted that the decision in the previous case discussed the meaning of "exempted goods" and clarified that goods supplied to SEZ units were neither chargeable to a nil rate of duty nor exempted from duty under any exemption notification. The Tribunal concluded that the appellants were eligible for exemption under Notification 67/95 on clinker used in the production of cement cleared without duty payment to units in the SEZ.

The Tribunal also addressed the issue of whether supplies to SEZ should be treated as exports. Relying on certain court decisions, the Tribunal held that the appellants were indeed eligible for the exemption under the notification. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. The operative portion of the order was pronounced in open court, granting relief to the appellants based on the Tribunal's analysis and interpretation of the relevant legal provisions and precedents.