Tribunal grants exemption under Notification No. 67/95-CE for captive consumption to SEZ units.

The Tribunal ruled in favor of the appellant, holding them eligible for the exemption under Notification No. 67/95-CE for goods consumed captively and cleared to SEZ units without duty payment. The decision was based on precedents and interpretations of relevant rules, setting aside the duty recovery demand and granting consequential relief.

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Issues:
1. Eligibility for exemption under Notification No. 67/95-CE for goods consumed captively and cleared to SEZ units without duty payment.

Analysis:
The case involved the appellant, engaged in manufacturing gear boxes, gear motors, and parts thereof, availing exemption under Notification No. 67/95-CE for captively consumed goods cleared to SEZ units without duty payment. The department contended that such clearances to SEZ units rendered the appellant ineligible for the exemption. A Show Cause Notice was issued, leading to the original authority confirming duty recovery, interest, and penalty. The appellant challenged this before the Tribunal.

The appellant's counsel argued that the appellant should be eligible for the exemption as the goods were captively consumed and supplied to SEZ units, akin to exports. It was highlighted that a similar issue had been decided in the appellant's favor by the Tribunal in previous cases, which were accepted by the department. The department's representative appeared and both sides were heard.

The key issue revolved around whether the appellant could avail the exemption under Notification No. 67/95-CE for captively consumed goods cleared to SEZ units without duty payment. The Tribunal, referencing its previous decisions and the case of Ultratech Cements Ltd., held in favor of the appellant. It was noted that the final products cleared to SEZ were not exempted goods, as they were cleared under bond following prescribed procedures. Therefore, the demand for duty recovery was deemed unsustainable, and the impugned order was set aside, allowing the appeal with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, holding that they were eligible for the exemption under Notification No. 67/95-CE for goods consumed captively and cleared to SEZ units without payment of duty. The decision was based on precedents and interpretations of relevant rules and procedures, ultimately leading to the appeal being allowed with consequential relief.

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