TMI Blog2018 (1) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... reason that the finished goods are cleared to SEZ. Appeal allowed - decided in favor of appellant. - E/101, 102/2011 - Final Order No.40150-40151/2018 - Dated:- 19-1-2018 - Ms. Sulekha Beevi, Member ( Judicial ) And Shri Madhu Mohan Damodhar, Member ( Technical ) Shri Joseph Prabakar, Advocate for the Appellant Shri S. Govindarajan, AC (AR) for the Respondent ORDER Per Bench Brief facts are that the appellants are manufacturers of Gear Box, Gear Motor and parts thereof and are registered with the Central Excise Department. The officers of the department visited the premises of the appellant and noticed that during the period 2006-07 to 2008-09, the appellants have cleared their manufactured products to SEZ without payment of excise duty, being deemed exports. They were also availing the exemption on inputs such as parts of gear box and motor captively consumed in terms of Notification No. 67/1995. The department was of the view that as the final products are cleared without payment of duty, the appellants are not eligible for the benefit of exemption of duty under Notification No. 67/1995 for the reason that the said notification does not specify cleara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant in the present case which exempts the goods specified in Col. 1 of the table ( referred to as inputs) manufactured in a factory and used within the factory of production in or in relation to manufacture of final products specified 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 exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as to SEZ Developers by a D.T.A. unit would have been treated as exports for the purpose of Cenvat Credit Rules, 2004. Since the supplies to SEZ Developers are export, the same cannot be treated as exempted goods and hence the provisions of sub-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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed under Rule 19 of the Cenvat Credit Rules. Rule 19 of Central Excise Rules, 2002 is reproduced as under : RULE 19. Export without payment of duty. - (1) Any excisable goods may be exported without payment of duty from a factory of the producer or the manufacturer 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. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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