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TMI Blog2018 (1) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... CESTAT CHENNAI] had occasion to consider the very same issue and observed that the benefit of notification cannot be denied for the reason that the finished goods are cleared to SEZ. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... those goods which are cleared, - (i) ............... (ii) ............... (iii ............... (iv ............... (v) ............... (vi) by a manufacturer of dutiable and exempted final products, after discharging the obligation prescribed in rule 6 of the Cenvat Credit Rules, 2004." 5.3 The clause (1) in the above notification has been amended by Notification No.25/2016-CE dated 14.06.2016, whereby the words Free Trade Zone has been substituted by the words Special Economic Zone. The amendment has been made by way of substitution. The decision in the case of Lotus Power Gears Pvt. Ltd. (supra) has held that the amendment brought by way substitution would take effect retrospectively. The Tribunal in the case of Ultratech Cements Ltd. (supra) had occasion to consider the very same issue and observed that the benefit of notification cannot be denied for the reason that the finished goods are cleared to SEZ. The relevant portion is reproduced as under:- "23. Before detailed discussion, it is relevant to reproduce the Notification No. 67/95-C.E., dated 16-3-1995 : - Captive consumption (Goods used within factory of production) GENERAL EXEMPTION NO. 6 Exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Col. 2 of the table. Clinker classifiable under sub-heading 2502 10 is covered under Column 1 of the Table as input and cement classifiable under Chapter Heading 2502 09 is covered under Column 2 of the Table as final product. Therefore, there is no dispute that both inputs and final products are specified in the table of the notification and the appellants manufactured clinker and captively consumed for manufacture of cement and cleared the cement on payment of duty to DTA and without payment of duty to S EZ units/developers. We also find in some of the appellant s cases, the demand relates to the period prior to the enactment of SEZ Act i.e., 10-2-2006 where the finished goods were cleared without payment of duty to SEZ under Notification No. 58/2003-C.E., dated 22-7-2003. The period involved in all these cases relates from 2004 to 2011. The appellants main contention is that the goods cleared to the SEZ unit/developers are not exempted from excise duty but cleared without payment of duty by following the requisite procedures set out in SEZ Act and SEZ Rules read with Central Excise Rules. The Revenue contended that goods supplied to SEZ are exempted and demanded duty on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-rules (1), (2) and (3) of the Rule 6 of the Cenvat Credit Rules, 2004 would not be applicable. Same view have been taken by the Tribunal in the case of Sujana Metal Products Ltd. v. CCE, Hyderabad (supra), wherein the Tribunal held that during the period prior to 31-12-2008, supplies to SEZ Developers made without payment of duty are to be treated as exports and would be covered by sub-rule (6) of Rule 6 and accordingly the provision of sub-rules (1), (2) and (3) of Rule 6 would not be applicable. 24. From the above decision, we find that the issue relates to availment of Cenvat credit, where the appellants have supplied both dutiable and exempted goods. While allowing the appeal, the Tribunal has categorically discussed the meaning of exempted goods defined in Rule 2(d) of Cenvat Credit Rules and held that the goods supplied to the SEZ units/developers are neither chargeable to nil rate of duty nor the goods are exempted from payment of duty by any exemption notification issued under Rule 5A. The Principal Bench s above decision is squarely applicable to the facts of the present case. In the present case, we find the sub-clause (vi) of the proviso to Notification No.67/95-C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or the warehouse or any other premises, as may be approved by the Principal Commissioner or Commissioner, as the case may be. (2) Any material may be removed without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, for use in the manufacture or processing of goods which are exported, as may be approved by the Principal Commissioner or Commissioner, as the case may be. (3) The export under sub-rule (1) or sub-rule (2) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board. There is no dispute that the appellants had duly followed the procedures set out in the above Rules, and executed bond before the excise authorities and cleared the goods without payment of duty. If the goods are fully exempted, the question of following the procedure under ARE-1 and execution of bond does not arise. Accordingly, we hold that the cement cleared to SEZ unit/developers are not exempted goods but cleared without payment of duty by following the procedures and conditions stipulated in both SEZ and Rule 19 of CER Rules and the clinkers used captively for manufacture of cement cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X
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