Tribunal Waives Pre-Deposit for SEZ Clearance, Stays Recovery

The Tribunal waived the requirement of pre-deposit of duty, interest, and penalty amounting to Rs. 1,19,665/- and Rs. 10,000 respectively, for the clearance of certain products to a Special Economic Zone pending appeal, following precedents where exports to SEZ were not considered exempted goods. The recovery was stayed until the appeal's final disposal, based on a previous Tribunal stay order in the applicant's own case. The Tribunal emphasized strict interpretation of notifications and cited cases where pre-deposit was waived in similar circumstances.

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Issues involved: Application for waiver of predeposit of duty u/s Central Excise Tariff Act, 1985 for clearance to Special Economic Zone without payment of duty.

Summary:
The applicant, engaged in the manufacture of industrial alcohol and chemicals, filed an application for waiver of predeposit of duty amounting to Rs. 1,19,665/- along with interest and penalty of Rs. 10,000. The demand of duty arose due to the clearance of Acetic Acid, Ethyl Acetate, and Anhydride to a Special Economic Zone without payment of duty. The adjudicating authority noted that duty should be paid on intermediary products used in the factory for manufacturing the final products, as the final product is exempted. The applicant's advocate referred to a previous Tribunal stay order in their own case, where unconditional stay was granted.

The Revenue representative argued that Notification 65/95 does not allow exemption for clearances to SEZ, emphasizing that notifications should be strictly interpreted as per decisions of the Hon'ble Supreme Court. After considering both sides, the Tribunal found that in the applicant's own previous case, unconditional stay was granted on the same issue. The Tribunal cited previous decisions where exports to SEZ were not considered as exempted goods, and pre-deposit was waived in similar cases. Consequently, the Tribunal waived the requirement of pre-deposit in the current case pending the appeal's disposal, following the precedent set by previous decisions. The predeposit of duty, interest, and penalty was waived, and the recovery was stayed until the appeal's final disposal. The stay application was allowed, and the decision was pronounced in open court.

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