Custom, Excise & Service Tax Tribunal
M/S The India Cements Ltd vs Commissioner Of Customs, Central ... on 30 January, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. E/1893/2010 (Arising out of Order-in-Original No. 06 & 07/2010 (C.Ex.) dated 31.05.2010 passed by Commissioner of Customs, Central Excise and Service Tax, Tirupati Commissionerate) M/s The India Cements Ltd., ..Appellant(s) Vs. Commissioner of Customs, Central Excise & Service Tax, Tirupati ..Respondent(s)
Appearance Shri G. Prahlad, Advocate for the Appellant.
Shri Dass Thavanam, Superintendent (AR) for the Respondent.
Coram:
Honble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Honble Mr. MADHU MOHAN DAMODHAR, MEMBER (TECHNICAL) Date of Hearing: 30/01/2018 Date of Decision: 30/01/2018 FINAL ORDER No. A/30137/2018 [Order per: M.V. Ravindran] This appeal is directed against Order-in-Original No. 06 & 07/2010 (C.Ex.) dated 31.05.2010.
2. Heard both sides and perused the records.
3. On perusal of records, it transpires that the issue is regarding demand on confirmation of an amount of 10% of the value of exempted goods.
4. It transpires from the records, that the appellant herein had cleared cement to a SEZ developer without payment of duty while availing CENVAT credit of the Central Excise duty paid on common inputs and input services. It is the case of the Revenue in the show cause notice and confirmed by the Adjudicating Authority that clearances having been affected to SEZ developers claiming exemption from payment of duty, having not maintained separate accounts for common inputs and input services, appellant is liable to discharge 10% of the value of cement cleared to SEZ developer.
5. We find that the issue is no more res integra, the Tribunal in the case of Sujana Metal Products Ltd., Vs. Commissioner of Central Excise, Hyderabad [2011 (273) ELT 112 (Tri.-Bang.)] has settled the law after referring various provisions of CENVAT Credit Rules and SEZ Act. The ratio is in paragraph No. 11, 12 & 13 which we reproduce:
11.?In the present case, taking into account the provisions of the erstwhile SEZ in Chapter XA of the Customs Act, the provisions in the SEZ Act and the clarifications of the Board (except the clarification dated 7-1-2009), it is apparent that the intention was to make available the benefits to SEZ developer for the authorized operations in addition to SEZ units and therefore the amendment No. 50/2008-C.E. (N.T.), dated 31-12-2008 Cenvat Credit Rules, 2004 is applicable retrospectively. However, as the amendment by No. 50/2008 is only to Rule 6 of Cenvat Credit Rules, 2004, the question of extending the benefit of amendment to Cenvat Credit Rules, 2002 does not arise.
12.?As the issues involved relate to interpretations of SEZ provisions under the Customs Act, SEZ Act and provisions of the Central Excise Rules and the Cenvat Credit Rules, no charge of suppression by the assessees can be sustained and, therefore, the question of invoking the extended period of limitation and also imposing penalties does not arise.
13.?From the above, the following emerges.
a. For the period upto 9-2-2005, the supplies made to SEZ units are to be treated as export both for extending export benefits and for levy of duty in terms of SEZ provisions contained in Chapter XA of the Customs Act.
b. For the period from 10-2-2006, the definition of the term export under the Customs Act is not consistent with the definition of the term export under the SEZ Act. However, the definition of the term export under the SEZ Act shall prevail over the definition of term export under the Customs Act. Therefore, supplies made to SEZ from DTA units shall be treated as export.
c. Since both during the period prior to and w.e.f. 10-2-2006, the supplies made to SEZ are held to be export, the application of provisions of Cenvat Credit Rules for recovery of amounts on goods supplied to SEZ units in terms of Rule 6 of CCR, 2002/CCR, 2004 does not arise.
d. The amendment to Rule 6(1) of the CCR, 2004 by the amending Notification No. 50/2008-C.E. (N.T.), dated 31-12-2008 shall be applicable w.e.f. 10-9-2004 when the CCR, 2004 came into existence and, therefore, exception provided under Rule 6(6) of Cenvat Credit Rules, 2004 shall be applicable to supply of exempted goods both to SEZ units and SEZ developers/promoters.
e. Appeals of the assessees deserve to be allowed and the appeals of the Department deserve to be rejected.
f. Incidentally, in the facts and circumstances of the case, the question of invoking extended period of limitation for demand of amounts and imposition of penalties does not arise.
Aggrieved by such an order by the Tribunal, Revenue preferred an appeal before the Honble High Court of Andhra Pradesh and the said appeal was dismissed by the High Court as reported at [2016 (342) ELT A115 (AP)] wherein their lordships followed the law as settled by Honble High Court of Chhattisgarh in the case of Steel Authority of India Ltd., [2013-TIOL-384-HC-Chhattisgarh]. In our view, the issue stands decided in the appellants favour.
6. In view of the foregoing, we hold that the impugned order is unsustainable and liable to be set aside and we do so. The impugned order is set aside and the appeal is allowed.
(Order dictated & pronounced in open court)
MADHU MOHAN DAMODHAR M.V. RAVINDRAN
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Lakshmi.
Appeal No. E/1893/2010
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