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2018 (1) TMI 1166

he benefit of exemption of duty under N/N. 67/1995 for the reason that the said notification does not specify clearances made to SEZ - whether the appellants are eligible for exemption under N/N. 67/1995, when the final products are cleared to SEZ? - Held that: - The clause (1) in the above notification has been amended by N/N. 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. [2016 (6) TMI 998 - KARNATAKA HIGH COURT] has held that the amendment brought by way substitution would take effect retrospectively. - The Tribunal in the case of Ultratech Cements Ltd. [2015 (10) TMI 1058 - CESTAT CHENNAI] 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. - 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, Advoc .....

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mendment has retrospective application. He also submitted that the issue stands covered in the case of Ultratech Cements Ltd. Vs. CCE & ST, Trichy - 2016 (343) ELT 164 (Tri.-Chen.) 3. The Ld. AR, Shri S. Govindarajan, AC, reiterated the findings in the impugned order. 4. Heard both sides. 5.1 The issue posing for consideration is whether the appellants are eligible for exemption under Notification No. 67/1995, when the final products are cleared to SEZ. 5.2 The relevant part of the Notification as it stood during the material time reads as under:- Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of duty of excise or additional duty of excise leviable thereon or are chargeable to Nil rate of duty, other than those goods which 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 Notificat .....

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after discharging the obligation prescribed in rule of the Cenvat Credit Rules, 2001. TABLE S. No. Description of inputs Description of final products (1) (2) (3) All goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the light diesel oil, high speed diesel oil and motor spirit commonly known as petrol. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than matches As seen from the above notification, the clause (ii) of the notification is 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 manufac .....

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sentative pleads that supplies to SEZ Developers are only deemed export and cannot be treated as export for the purpose of Central Excise Act, 1944 and the Rules made thereunder, Section 51 of the SEZ Act provides that the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. In view of the overriding provisions of Section 51 of SEZ Act, supplies to SEZ as 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 .....

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ods under any notification issued under Section 5A of the Central Excise Act. 26. In this regard, it is pertinent to state that if the Revenue s contention is to be taken that the goods cleared to the SEZ units are exempted, then the question of following the procedures stipulated under SEZ Act and under Rule 19 of Central Excise Rules, 2002 does not arise. On a perusal of the records, we find that the appellants have cleared the goods to SEZ under-bond by following the ARE-1 procedures prescribed 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) T .....

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