SEZ clearances treated as exports, supporting prima facie exemption and interim relief from pre-deposit and recovery.

Unconditional interim relief was granted in a dispute over duty, interest and penalty on clinker captively consumed in cement cleared to a Special Economic Zone. The Tribunal treated the SEZ clearances as exports, noting that the zone is deemed to lie outside the domestic tariff area. On that prima facie basis, it held that the proviso to Notification No. 67/95-CE was not attracted to deny exemption for clinker used in cement cleared to the SEZ. The earlier grant of unconditional stay in the applicant's own identical case also supported waiver of pre-deposit and stay of recovery pending appeal.

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Issues: Whether the applicant was entitled to waiver of pre-deposit and stay of recovery in respect of the duty, interest and penalty demands arising from captive consumption of clinker used in cement cleared to a Special Economic Zone.

Analysis: The Tribunal noted that in the applicant's own case on an identical issue, unconditional stay had already been granted. It also relied on the earlier reasoning that clearances to a Special Economic Zone are to be treated as exports, the zone being deemed to lie outside the domestic tariff area. On that basis, the proviso to Notification No. 67/95-CE was held, prima facie, not attracted to deny exemption on clinker used in the manufacture of cement cleared to the Special Economic Zone. The existence of a prima facie case and the earlier stay order supported interim relief.

Conclusion: Waiver of pre-deposit and stay of recovery were granted in favour of the applicant pending disposal of the appeal.

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