TMI Blog2007 (4) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... s availing Cenvat credit. The assessee was selling their goods to their customers located at Kandla Special Economic Zone earlier known as Kandla Free Trade Zone. The assessee has availed Cenvat credit of duty paid on the inputs used in the manufacture of the exempted as well as dutiable finished products, without maintaining separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable and exempted goods, as well as failed to pay an amount equal to 8% of total assessable value of exempted finished products as required under Rule 57AD(2)(b), since the relaxations available under Rule 57AD(4) of Central Excise Rules, 1944 of not reversing Cenvat were not applicable to a case where the exempte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact it was only a change of the name and hence, the benefit cannot be denied. 6. It may be further noted that, while Kandla Free Trade Zone was converted into SEZ with effect from 1-11-2000 corresponding legal changes were not made in Section 3 of C. Ex. Act, 1944 which was amended w.e.f. 11-5-2001 to include SEZ. Thus as far us Section 3 is concerned, it became operative from 11-5- 2001 vis-a-vis SEZ. 7. Keeping in view the fact that notification prescribing the geographical boundaries of SEZ was issued on 27-3-2001 and the fact that the Section 3 of C. Ex. Act was amended with effect from 11-5-2001, it can be said that technically speaking Kandla Free Trade Zone continued to co-exist till 26-3-2001 despite the fad that Ministry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Trade Zone as far as Central Excise Act and Rules are concerned, and therefore, they were entitled to the benefit of Notification 82/92-C.E." 9. Further he place reliance in the cases of Ratnamani Metal of Tubes Ltd. v. CCE - 2004 (171) E.L.T. 425 (CESTAT - Mum) and Pillar inductions India Ltd. v. CCE - 2004 (166) E.L.T. 43 (Tri - Chennai) to contend that there was no machinery provision at relevant time for recovery of the amount due since the law has been amended providing for machinery and the explanation I has been inserted under Rule 6 ibid, which became effective w.e.f. 1-7-2001 and Explanation II has been inserted by Cenvat Credit Rules, 2002 which became effective w.e.f. 1-3-2002. 10. The ld. Commissioner (Appeals) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration as the ld. Commissioner (Appeals) did not accept the same and rejected on the ground that the Special Economic Zone was created by the Notification No. 52/2000 and only in subsequent Notification No. 12/2001 dated 27-3-2001 made Kandla Special Economic Zone as Free Trade Zone and therefore the Kandla Special Economic Zone could be treated only after 27-3-2001. 12. Kandla Free Trade Zone occupies the geographical area which was subsequently designated as a Special Economic Zone under Notification No. 52/2000. There is no dispute that geographically, Kandla Free Trade Zone and Kandla Special Economic Zone occupied the same area. The geographical area of Kandla Free Trade Zone as described under Rule 2 of the erstwhile Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of this zone also as a Special Economic Zone Therefore the clearances effected during the period 19-10-2000 to 27-3-2001 to a unit in Kandla Special Economic Zone should have been considered on par with clearances to Kandla Free Trade Zone with all benefits admissible to such clearances as if they were made to Kandla Free Trade Zone Thus, the findings of the ld Commissioner that these areas are required to be treated as separate areas for applicability of the concessions provided by the said notification are erroneous and illegal 13 In the light of above said discussion impugned orders are hereby set aside with consequential relief as admissible under the law In result the appeal is allowed. (Pronounced in Court on 20-4-2007) - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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