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Issues: (i) Whether supplies made to a Special Economic Zone developer could be treated as exports so as to take the case outside the restriction in Rule 6(6) of the Cenvat Credit Rules, 2004; (ii) whether the assessee had made out a case for waiver of pre-deposit and stay of recovery pending appeal.
Issue (i): Whether supplies made to a Special Economic Zone developer could be treated as exports so as to take the case outside the restriction in Rule 6(6) of the Cenvat Credit Rules, 2004.
Analysis: Supplies to a Special Economic Zone developer were regarded as having a strong prima facie character of export in view of the definition of export under Section 2(m)(ii) of the Special Economic Zone Act, 2005. Section 51 of that Act gives overriding effect to its provisions in case of inconsistency with any other law. On that footing, once the goods are treated as exported, the exception in Rule 6(6) becomes available, and the subsequent amendment to Rule 6(6)(i) was also noted.
Conclusion: The supplies were held to be covered by the export treatment for the purpose of the interim relief claimed.
Issue (ii): Whether the assessee had made out a case for waiver of pre-deposit and stay of recovery pending appeal.
Analysis: In light of the prima facie view on export treatment and the statutory override under the Special Economic Zone Act, 2005, the assessee established a strong prima facie case against immediate recovery of duty and penalty.
Conclusion: Waiver of pre-deposit was granted and recovery of the disputed amount was stayed during pendency of the appeal.
Final Conclusion: Interim protection was granted to the assessee by suspending recovery of the disputed demand and dispensing with pre-deposit pending disposal of the appeal.
Ratio Decidendi: Supplies to a Special Economic Zone developer may be treated as exports for the purpose of Rule 6(6) of the Cenvat Credit Rules, 2004, where the Special Economic Zone Act, 2005 confers overriding effect and the assessee establishes a strong prima facie case.
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