2024 (5) TMI 189

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....ture' falling under Chapter heading 94031090 of the Central Excise Tariff Act, 1985. During the period 21.05.2007 to 30.12.2008, they have cleared excisable goods without payment of duty to the developers of Special Economic Zone (SEZ). They have availed cenvat credit on duty paid on all inputs received in their factory but not maintained separate accounts for the inputs used in the manufacture of excisable goods and the inputs used in the manufacture of excisable goods cleared without payment of duty to developers of SEZ. Alleging that they have violated Rule 6(2) of the Cenvat Credit Rules, 2004 by not maintaining separate account, show-cause notice dated 15.12.2009 was issued demanding an amount of Rs.1,23,57,507/- equal to 10% of the va....

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....been held consistently by the Karnataka High Court that supplies to SEZ units / developers post-amendment to CENVAT Credit Ruels, 2004 vide Notification No.50/2008-CE(NT) dated 31.12.2008 is retrospective and by virtue of Section 151 of SEZ Act, 2005 which overrides all other laws, the benefit of Rule 6(6)(i) has been extended to clearances made to SEZ units and SEZ developers. In support, he has referred to the following judgments: i. CCE&ST, Bangalore Vs. Fosroc Chemicals (India) Pvt. Ltd. [2015(318) ELT 240 (Kar.) ii. CCE, Bangalore-III Vs. Elins Switch Boards Pvt. Ltd. [2017(49) STR 398 (Kar.)] iii. CCE, Bangalore-III Vs. Lotus Power Gears (P) Ltd. [2017(346) ELT 347 (Kar.)] 3.2. Further he has submitted that this Tribunal follow....

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....f the CENVAT Credit Rules, 2004 in the context of Notification No.50/2008-CE(NT) dt. 31.12.2008 whereby the earlier Rule 6(6)(i) has been amended as "cleared to a unit in a special economic zone or to a developer of a special economic zone for their authorised operations" w.e.f. 31.12.2008 held that the same is retrospective operation. It is observed in para 13 as under:- 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 d....

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....o be read and construed as if the altered words had been written into the Rules of 2004 with pen 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 D....