TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 250
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....out payment of duty against Letter of Undertaking (LUT). The appellant also cleared products to SEZ units and SEZ Developers under Letter of Undertaking without payment of duty and was availing cenvat credit on inputs used in the manufacture of final products in terms of the provisions of Cenvat Credit Rules, 2004. Rule 6 of the Cenvat Credit Rules deals with the obligation of manufacturers of both dutiable and exempted goods, sub-rule (1) stipulates that credit shall not be allowed on inputs used in the manufacture of exempted goods except as provided under sub-rule (2) of Rule 6 which stipulates that manufacturer of both dutiable and exempted goods shall maintain account for receipt, consumption and inventory of input and input services m....
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....respective of the fact whether duty is paid on final product or not covering the period before or after 01.04.2008, one such category is clearance of final products without payment of duty to 'units' in SEZ and this rule does not cover clearances made without payment of duty to SEZ 'Developer'. Accordingly, if a manufacturer clears goods to SEZ developer without payment of duty and avails credit on input or input services used in the manufacture of final goods in contravention of Rule 6(1) and 6(2) of the Cenvat Credit Rules, 2004, then that manufacturer is required to pay an amount equal to 10% of the value of exempted goods before 01.04.2008 and after 01.04.2008 the manufacturer is required to pay 10% of the value of the e....
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.... The Learned Chartered Accountant (CA) for the appellant submitted that prior to 31.12.2008, the Cenvat Credit Rules, 2004 have exempted the provisions of sub-rule 6 for the goods removed without payment of duty or cleared to a 'unit' in a Special Economic Zone and by amendment to Cenvat Credit Rules vide Notification No. 50/2008-CE(NT) dated 31.12.2008, Sub-rule 6 has been substituted. The appellant submitted that in the case Commissioner of Central Ex. & ST, Bangalore Vs. Fosroc Chemicals (India) Pvt. Ltd. - 2015 (318) ELT 240 (Kar.) the Hon'ble High Court of Karnataka held that the effect of the substitution of Rule 6 of Cenvat Credit Rules, 2004 is clarificatory in nature and that the SEZ developer is included during the period ....
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....erefore covered under clause (v) ibid does not have any force and is therefore liable to be rejected. Therefore, I find that the denial of cenvat credit availed in respect of supply without payment of duty to the SEZ Developers prior to 31.12.2008 is legally maintainable. I accordingly do not find any infirmity in the impugned order." 5. The learned AR further submitted that the case of Fosroc Chemicals Ltd., was considered by the Hon'ble High Court of Karnataka in Commissioner of Central Excise, Customs and Service Tax, Bengaluru Vs. M/s. BASF Construction Chemicals India Pvt. Ltd.-2020 (8) TMI 292-Karnataka High Court, wherein it was mentioned that the case is pending before the Hon'ble Apex Court. However, there is no stay. 6. The ....
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....ory of India for the purposes of undertaking the authorized operations. The word "export" has been defined under Act at Section 2(m). According to the definition of the word export, vide Section 2(m)(ii) "export" means supplying goods or providing services, from the Domestic Tariff Area to a Unit or Developer. Such exports were exempted from duty of Central Excise under Section 26 of the SEZ Act, 2005 and consequently application of Cenvat Credit Rules. Section 151 of the Special Economic Zones Act, 2005, overrides the provision of all other laws for the time being in force, notwithstanding anything inconsistent therein with the provision of the Special Economic Zones Act, 2005. This section therefore overreaches and eclipses the provisions....
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.... for their authorized operations inside a SEZ notified under sub-section (1) of Section 4 of the Act, may be treated as in the nature of exports". 10. Further, this Tribunal's order in the matter of M/s. Sujana Metal Products Ltd., Vs. CCE, reported in 2011 (273) ELT 112 was not accepted by the Department and same was challenged before the Hon'ble Andhra Pradesh High Court and Hon'ble High Court of Andhra Pradesh, as per the judgment dated 02.07.2013 reported in 2016 (342) ELT A115 (A.P) dismissed the Departmental appeal, and no appeal against the order was filed by the Department. Further, pursuant to the revision of monetary limits under the Litigation Policy, the matter of M/s. Fosroc Chemicals (India) Pvt. Ltd., was listed for hear....