Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 1058 - CESTAT CHENNAIDenial of exemption claim - Captive consumption - Notification No.67/95-CE, dated 16.03.1995 - SEZ clearances - whether the goods supplies to SEZ Developers without payment of duty are to be treated as exempted goods within the meaning of this term as defined in Rule 2(d) of the Cenvat Credit Rules, 2004 and whether in respect of these supplies, the provision of sub-rule (2) and (3) of Rule 6 ibid would be applicable - Held that:- sub-clause (vi) of the proviso to Notification N0.67/95-CE is an exception clause where a manufacturer of dutiable and exempted goods is eligible if he discharges the obligation prescribed in Rule 6 of Cenvat Credit Rules, 2001. As rightly submitted by both Revenue and the appellants, there is no definition of ‘exempted goods' in Central Excise Act except Rule 2 (d) of Cenvat Credit Rules. The Tribunals decision in the case of Surya Roshni (2013 (1) TMI 500 - CESTAT, NEW DELHI) discussed above clearly answers the above question. When the words exempted goods used in the said notification, it only means ‘final products exempted under the Central Excise Act read with Central Excise Rules or any notification issued there under'. 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 cleared to SEZ is covered under Notification 67/95 from exemption of excise duty. - Tribunal in the case of Thermo Cable (2012 (12) TMI 942 - CESTAT BANGALORE) on identical issue held the benefit of Notification No.67/95-CE is eligible for the goods captively consumed for manufacture of final products cleared against the international competitive bidding under Notification No.6/2006. Ratio of Tribunal decision squarely applicable to the present case, the appellants are eligible for the benefit of the exemption under Notification No.67/95. As final resort demanding duty on the intermediate product is otherwise also hit by Revenue neutrality, as the appellants are otherwise entitled to avail the Cenvat credit of the duty, if any paid on clinker. Alternatively, if a manufacturer avails exemption on intermediate product under Notification 67/95-CE and chooses to pay duty on the cement when cleared to SEZ unit/developer, the duty paid on final product will be fully available to him as refund/rebate. Thus, on both counts the issue is purely revenue neutral. It is not the intention of the government to demand duty on the intermediate product having considered that the supplies to SEZ are exports. Therefore, the demand of duty on the intermediate product clinker used in manufacture of cement supplied to SEZ units/developers is clearly revenue neutral as the appellants could have claimed refund or availed Cenvat credit. In this regard, as rightly held by the Tribunal in the case of Reliance (2007 (12) TMI 69 - CESTAT, AHMEDABAD) demand of duty on intermediate products will only increase scriptory work with no benefit to the revenue. - appellants are eligible for exemption under Notification 67/95-CE on clinker captively consumed for manufacture of cement cleared to SEZ units/developers without payment of duty for both the periods prior to and after the amendment of SEZ Act. Accordingly, the impugned orders in all the assessees appeals are set aside - decided in favour of assessee.
|