Tribunal rules in favor of manufacturer in SEZ supplies case, setting aside payment demand.

The Tribunal ruled in favor of the appellant, a manufacturer of excisable goods, in a case involving supplies to an SEZ company. The appellant's argument, supported by case law, led to the setting aside of the order-in-appeal demanding payment under Rule 6(3)(b) of Cenvat Credit Rules. The Tribunal held that supplies to SEZ units should be treated as exports, exempting them from the Cenvat Credit Rules. The judgment provided clarity on the treatment of supplies to SEZ entities, favoring the appellant and granting any consequential relief.

---

---

Issues:
- Appeal against order-in-appeal upholding order-in-original
- Whether supplies to SEZ Developer attract Rule 6(6) of Cenvat Credit Rules
- Liability to pay 10% of value of goods supplied without separate accounts

Analysis:
The appellant, engaged in manufacturing excisable goods, received orders from an SEZ company for supply of steel items. The SEZ company certified its SEZ status, and the appellant declared the clearances as exports at nil duty rate. However, a show cause notice was issued demanding payment under Rule 6(3)(b) of Cenvat Credit Rules. The demand was confirmed by the adjudicating authority and upheld by the Commissioner (Appeals), leading to the present appeal.

The appellant relied on various case laws to support their argument for setting aside the order-in-appeal. The Revenue, represented by the learned AR, supported the lower authorities' findings. The Tribunal considered whether supplies to SEZ Developer before 31.12.2008 attract Rule 6(6) of Cenvat Credit Rules and if the appellant is liable to pay 10% of the value of goods supplied without separate accounts.

Referring to previous judgments, the Tribunal concluded that supplies to SEZ units are to be treated as exports, exempting them from the provisions of Cenvat Credit Rules. The Tribunal held that the appellant's case aligns with the cited judgment, setting aside the impugned order and allowing the appeal with any consequential relief.

The judgment, pronounced on 22.12.2015 by MR. S.S. GARG, MEMBER (JUDICIAL), favored the appellant based on the interpretation of relevant legal provisions and precedents, providing clarity on the treatment of supplies to SEZ entities under the Cenvat Credit Rules.

---