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Supplies to SEZ developers will not require reversal of 10% amount

Issue 

Whether appellant is required to pay an amount @ 10% of the value of clearances made to SEZ developers


The tax litigation of M/s Polysil  Tubes  was handled by Shri Anand Mishra, Advocate, Amlegals

Held 

By an amendment (effective from 31.12.2008) such credit taken by a unit has been held to be admissible. It has been interpreted by CESTAT Bangalore in the case of Sujana Metal Products Ltd vs. CCE Hyderabad (Supra) that the amendment made in Rule 6(6) of CCR is retrospective


When a specific case law of a High Court on amendment is available it is not correct to hold that intention of legislature has to be interpreted on the basic of other case laws as done by first appellate authority


The entire order is reproduced herein below :


CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL  West Zonal Bench, Ahmedabad

Appeal No. : E/10208/2013

(Arising out of OrderIn-Appeal No.SRP100VAPI2012-13 Dated 01.11.2012 Passed by Commissioner Of Central Excise-VAPI)

M/s Polysil Pipes : Appellant (s)
VERSUS

Commissioner of Central Excise &
Service Tax-Vapi : Respondent (s)

Represented by :

For Appellant (s) : Shri. Anand Mishra, Advocate
For Respondent (s): Shri. S. Shukala, Authorised Representative
CORAM :

Mr. H.K. Thakur, Honble Member (Technical)
Date of Hearing / Decision : 27.07.2015
ORDER No. A/11156/2015 Dated 27.07.2015

Per : Mr. H.K. Thakur;

This appeal has been filed by the appellant with respect to OIA No. SRP/100/VAPI/2012-13 dated 01.11.2012 passed by Commr. (A), VAPI

2. Shri. Anand Mishra (Advocate) appearing on behalf of the appellant argued that the issue involved is whether appellant is liable to pay an amount of 10% on the value of clearances made to SEZ developers in terms of Rule  6(6) of the Cenvat Credit Rules 2004. Learned Advocate relied upon the case Law of CESTAT, Bangalore reported as Sujana Metal Products Ltd vs. CCE Hyderabad [2011 (273) ELT 112 (Tri.-Bangalore)], where it was held that amendment later carried out in Rule 6(6) is retrospective in nature and will cover appellants period also. That order passed by CESTAT Bangalore in Sujana Metal case was Later relied upon by Karnataka High Court in the case of CCE and ST Bangalore vs. Forsoc Chemicals (India) Pvt Ltd [2015 (318) ELT 240 (Kar.)].

3. Shri. S. Shukla (AR) appearing on behalf of the Revenue argued that Commr. (A) has relied upon certain case laws to hold that amendment carried out in Rule 6(6) is not retrospective. Learned AR strongly defended the order passed by the first appellate authority.

4. Heard both sides and perused the case records. The issue involved in these proceedings is whether appellant is required to pay an amount @ 10% of the value of clearances made to SEZ developers. By an amendment (effective from 31.12.2008) such credit taken by a unit has been held to be admissible. It has been interpreted by CESTAT Bangalore in the case of Sujana Metal Products Ltd vs. CCE Hyderabad (Supra) that the amendment made in Rule 6(6) of CCR is retrospective. The same ratio was followed by Karnataka High Court in the case of CCE and ST Bangalore vs. Forsoc Chemicals (India) Pvt. Ltd (Supra), to hold that the same amendment is retrospective. No contrary case law of other High Court has been brought forward by the Revenue with respect to the amendment carried out in Rule 6. When a specific case law of a High Court on amendment is available it is not correct to hold that intention of legislature has to be interpreted on the basic of other case laws as done by first appellate authority.

5. In view of the above observations the case laws relied upon by the appellants are squarely applicable to the facts in hand. Accordingly, appeal filed by the appellant is allowed.
(Operative part of the order pronounced in the Court)
(H.K. Thakur)
Member (Technical)

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