2012 (4) TMI 539 - AT - Central Excise

CENVAT Credit - appellant has neither maintained separate records nor paid an amount equivalent to 10% of the value of excisable goods cleared without payment of duty to the SEZ developers - Whether the appellant is required to pay 10% of the value of excisable goods in terms of provisions of Rule 6 of Cenvat Credit Rules - Held that - clearances made to SEZ developers do not qualify for waiver of conditions laid down in sub Rule (1) (2) (3) and (4) of Rule 6 of Cenvat Credit Rules 2004 - supplies made to SEZ developers are to be treated as deemed exports and is covered by provisions of Rule 6 (6) of Cenvat Credit Rules - Following decision of Sujako Interiors Pvt. Limited vs. CCE Ahmd. 2011 (2) TMI 624 - CESTAT AHMEDABAD - Decided in favour of assessee.

Summary

Issues involved:
1. Whether the appellant is required to pay 10% of the value of excisable goods under Rule 6 of Cenvat Credit Rules.

Analysis:

Issue 1: Requirement to pay 10% of the value of excisable goods
The appellant cleared excisable goods to SEZ developers without payment of duty, totaling Rs. 49,10,271/- involving Central Excise duty of Rs. 4,91,027/- during a specific period. The Revenue argued that the clearances to SEZ developers do not qualify for waiver under Rule 6 of Cenvat Credit Rules, as the appellant did not maintain separate records or pay 10% of the value of goods cleared without duty. The Tribunal noted that the issue had been previously addressed in the case of Sujako Interiors Pvt. Limited, where it was determined that supplies to SEZ developers are deemed exports and fall under Rule 6(6) of the Cenvat Credit Rules. Consequently, the Tribunal allowed the appeal in favor of the appellant, citing the precedent and granting consequential relief. The decision emphasized the applicability of Rule 6(6) to the situation, leading to the waiver of the conditions laid down in other sub-rules of Rule 6.

This judgment clarifies the interpretation and application of Rule 6 of the Cenvat Credit Rules in cases involving clearances of excisable goods to SEZ developers without payment of duty. It highlights the significance of maintaining compliance with the specified conditions and the impact of relevant precedents on the final decision. The ruling provides guidance on the treatment of supplies to SEZ developers as deemed exports under Rule 6(6), underscoring the importance of adherence to established legal principles in such matters.