2015-VIL-417-CESTAT-CHE-CE
Central Excise – Supply of cement to SEZ units/developers without payment of duty – Denial of exemption on clinkers manufactured and captively consumed in the manufacture of cement – Exemption Notification No.67/95-CE – Denial of exemption SEZ is not mentioned as category of exception under the proviso to the notification – Whether clinker manufactured by the appellants used in the manufacture of cement cleared to SEZ without payment of duty are eligible for benefit under Notification No.67/95-CE or not – Whether the term FTZ used in the proviso to the Notification 67/95-CE will include SEZ also –
HELD – Cement cleared to SEZ unit/developers are not exempted goods but cleared without payment of duty by following the procedures and conditions stipulated in both SEZ and Rule 19 of CER Rules and the clinkers used captively for manufacture of cement cleared to SEZ is covered under Notification 67/95 from exemption of excise duty – In view of the Board’s circular, dated 28.04.2015 and as per objectives of the SEZ Act, the goods supplied to SEZ unit/developer constitute as export and no duty can be levied on the clinker used in the manufacture of cement as the finished goods are supplied to SEZ units/developers without payment of duty by following procedures of Rule 19 of Central Excise Rules and Rule 30 of SEZ Rules – By virtue of the SEZ Act, the word ‘FTZ’ was omitted and substituted with the word ‘SEZ’. Therefore, the Revenue’s plea that the goods supplied to SEZ is not covered under clause (i) of the Proviso to the notification is not acceptable – Appellants are eligible for exemption under Notification 67/95-CE on clinker captively consumed for manufacture of cement cleared to SEZ units/developers without payment of duty for both the periods prior to and after the amendment of SEZ Act – Assessee appeals are allowed and revenue appeals are dismissed