2022 (2) TMI 6 - AT - Central Excise

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 ... Recovery of duty on the captively consumed goods along with interest and for imposing penalty - intermediate goods captively consumed when the final products have been cleared to SEZ units - clearances are made to SEZ without payment of duty - benefit of exemption of Notification 67/95-CE denied - HELD THAT:- The said issue has been decided in favour of the appellant by this Tribunal in the appellant’s own case in the above stated final orders by following the decision in the case of M/S ULTRATECH CEMENTS LTD AND OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, TIRUCHIRAPALLI AND OTHERS [2015 (10) TMI 1058 - CESTAT CHENNAI] where it was held that the cement cleared to SEZ unit/developers are not exempted goods but cleared without payment of duty by following the procedures and conditions stipulated in both SEZ and Rule 19 of CER Rules and the clinkers used captively for manufacture of cement cleared to SEZ is covered under Notification 67/95 from exemption of excise duty. The demand cannot sustain - Appeal allowed - decided in favor of appellant. 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.