2017 (1) TMI 1746

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....l Stainless Steel Ltd, who is a SEZ developer. The Department was of the view that clearances made to SEZ developers without payment of duty is in the nature of clearance of exempted goods which will invoke the mischief of Rule 6 of the Cenvat Credit Rule, 2004. Demand was raised to the extent of Rs. 30,36,120/- as an amount payable at the rate of 10% of the value of exempted clearance to SEZ developers along with interest and penalties. In the impugned order, Commissioner (Appeals) held that there is no requirement of the respondent paying an amount at the rate of 10% of the value of exempted goods under Rule 6(6)(i) of the Cenvat credit Rules, Since clearance to SEZ developers are in the nature of export. Further, he dropped the demand on....

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....6) of Rule 6 of Cenvat Credit Rules, 2004 by way of notification No. 50/2008-C.E.(N.T.), dated 31-12-2008 is prospective in operation or retrospective".  The Hon'ble High Court went on to decide the issue against Revenue. The relevant findings are as follows: "13. The Parliament has enacted the Special Economic Zones Act, 2005(The SEZ Act for short) to provide for the establishment, development and management of the Special Economic Zones for the promotion of exports and for matters connected therewith or incidental thereto. Section 53 of the Act declares that a special economic zone shall, on and from the appointed day, be deemed to be a territory outside the Customs territory of India for the purposes of undertaking the a....

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....n and ink and the words "to a developer of the SEZ for their authorized operation" was there from the inception. This is the understanding of the Government as is also clear from the circular issued by the C.B.E.&C. bearing No. 29/2006-Cus., dated 27-12-2006 wherein clause 4 reads as under :-  "4. In the light of the aforesaid provisions, with effect from 14-3-2006, Chapter XA of the Customs Act, 1962, the SEZ Rules, 2003, the SEZ (Customs Procedure) Regulations, 2003, and the exemption Notification No. 58/2003-C.E., dated 22-7-2003 regarding the supply of goods to SEZ units & SEZ developers have become redundant. Consequently the supplies from DTA to a SEZ unit, or to SEZ developers for their authorized operations inside a SE....