2018 (11) TMI 1727

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....he finished goods manufactured by it under ARE-1 to the "developers" of Special Economic Zone (SEZ), without payment of duty on the strength of letter of undertaking issued in terms of Rule 19 of the Central Excise Rules, 2002. Since the respondent did not maintain separate records as provided under Rule 6(2) of the Cenvat Credit Rules, 2004 and did not pay the amount equal to 10% of value of the exempted goods in terms of Rule 6(3) ibid, the department initiated show cause proceedings against the respondent, seeking for recovery of an amount of Rs. 63,03,648/- along with interest and for imposition of penalty. The matter was adjudicated vide the impugned order dated 02.08.2012, wherein the proposals made in the show cause notice were dropp....

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.... 31.12.2008 shall not be retrospectively applied for providing the benefit of removal of excisable goods to a developer of SEZ. 3. Learned AR appearing for Revenue has reiterated the grounds urged in the appeal filed by Revenue. He further submitted that the decision of the Tribunal in the case of Sujana Metal Products Ltd. vs. CCE, Hyderabad - 2011 (273) ELT 112 (Tri.-Bang.), holding that Rule 6(6)(i) ibid shall be retrospectively applicable, has been appealed against by Revenue before the Hon'ble High Court of Andhra Pradesh and as such, the said decision of the Tribunal cannot be relied upon to decide the present issue. 4. On the other hand, learned Advocate appearing for the respondent submitted that as per the provisions contained ....

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....(2) of Rule 6 ibid provides for maintenance of separate records for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final product and the quantity of inputs meant for use in the manufacture of exempted goods and the manufacturer is only permitted to avail cenvat credit on such quantity of inputs which are intended for use in the manufacture of dutiable goods. An option has been provided under sub-rule (3) of Rule 6 to the manufacturer for payment of amount, in the event of non-maintenance of separate records. However, sub-rule (5) of Rule 6 ibid provided that the embargo created in sub-rule (1), subrule (2) and sub-rule (3) shall not be applicable, in case the goods are cleared to a unit in the Spec....