Court rules in favor of appellant, setting aside clearances demand for SEZ developers.

The court ruled in favor of the appellant, setting aside the demand for clearances made to SEZ developers/units. The judge found that clearances to one SEZ developer should be treated as exports, not exempted goods, making Rule 6(3) inapplicable. For the other company, the demand was set aside based on Rule 6(6)(i) provisions as the company maintained a manufacturing unit in the SEZ during the dispute period. The judgment cited legal provisions and precedents supporting the appellant's arguments, ultimately allowing the appeal and overturning the department's decision.

---

---

Issues:
Challenge against demand raised under Rule 6(3) of CENVAT Credit Rules 2004 for clearances to SEZ developers/units without separate accounts maintenance.

Analysis:
The appeal challenges a demand raised on the appellant for clearances made to SEZ developers/units without maintaining separate accounts, as required by Rule 6(1) of the CCR 2004. The department demanded 10% of the sale price of goods cleared to SEZ developers/units during the period in question. The demand was based on a show-cause notice considering clearances to 4 parties in the SEZ. The adjudicating authority dropped the demand for two parties classified as SEZ units but confirmed it for two SEZ developers, imposing a penalty and interest. The appeal contests this decision.

The appellant's counsel argued that the demand for clearances to SEZ developers should be set aside based on legal provisions and precedents. Specifically, the counsel referenced the Development Commissioner's permission for one company and a Tribunal decision for the other, along with several Tribunal decisions supporting their stance. The counsel prayed for the appeal to be allowed based on these arguments.

The Deputy Commissioner (AR) highlighted the department's appeal against a related Tribunal decision but noted that the High Court had not stayed the Tribunal's decision. After considering the submissions, the judge ruled in favor of the appellant. The judge found that clearances to one SEZ developer should be treated as exports, not exempted goods, making Rule 6(3) inapplicable. For clearances to the other company, the demand was set aside based on Rule 6(6)(i) provisions during the dispute period, as the company maintained a manufacturing unit in the SEZ. The judge concluded by setting aside the impugned order and allowing the appeal.

In conclusion, the judgment favored the appellant by setting aside the demand for clearances made to SEZ developers/units, citing legal provisions and precedents supporting the appellant's arguments.

---