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2019 (2) TMI 1557 - AT - Central ExciseCENVAT Credit - goods on which CENVAT credit had been availed was deployed for the manufacture of excisable goods, viz., ‘gypsum board’, ‘jointing compound’ and ‘gypboard moisture resistant ultra’ which was, inter alia, being cleared to developers of Special Economic Zone - rule 6(3) of CENVAT Credit Rules, 2004 - Held that:- The requirement of neutralisation of ineligible CENVAT credit is waived for certain categories of clearances including exports and clearances to units in special economic zones without, admittedly, covering developers of special economic zones. With the coming into force of Special Economic Zones Act, 2005, effective from 10th February 2006, exemption of duties on goods cleared from the domestic tariff area for use of developers or units in special economic zone is accorded by that special statute which does not distinguish between a unit and a developer - The gap in operationalising of the exemptions between two different arms of the Central Government, i.e., Ministry of Finance and Ministry of Commerce, should not have created an artificial, and uncontemplated, distinction between such clearances effected to special economic zones. Section 2(m) of the Special Economic Zones Act, 2005 includes supply from domestic tariff area to a unit or developer in the definition of ‘export’ and section 51 of Special Economic Zones Act, 2005 mandates that this statute would prevail over any other in the event of a conflict. Therefore, notwithstanding a subsequent amendment in rule 6(6) to the CENVAT Credit Rules, 2004, to include developer of special economic zones within the escapement covered of rule 6 of the said Rules, the categorization as exports would itself suffice to exclude the applicability of the liability prescribed therein. The impugned order has erred in upholding the liability of the appellant - appeal allowed - decided in favor of appellant.
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