Will the controversy end?
Yes, it should in probability end for the clearances made prospectively from 1/1/2009. Then what about past clearances? This is again an issue for raising big audit objections by C& AG.
Apart from the clearances made to SEZ units/SEZ developers directly, the DTA units also make clearances to contractors appointed by SEZ units. How to treat these clearances? Should they be treated as clearances made to SEZ units?
The government by amending clause i) of Rule 6 of CCR appears to be of the view that the clearances to SEZ developers/SEZ units as not constituting ‘exports under bond' so as to be covered under clause (v) of Rule 6(6) of CCR. Will this in any way weaken the DRI view point of holding such clearances as constituting ‘export' under bond?
Commenting on our above story, a distinguished Netizen had commented in our ‘Message Board',
It is not if Central Excise department doesnot treat supplies to SEZ developers as not being exports. In fact, rebate route as well as export under bond route has always been made available to SEZ developers since the inception of SEZ Rules. It is only that CENVAT credit to developers was not being permitted. In relation to the same also EGOM has taken a positive decision which is awaiting implementation. Just to give an update.
Maybe the Board should come out with a detailed clarification on these issues and be a good sport and make this amendment retrospectively valid – we may have to wait till the next Budget for that to happen.
Anyway CBEC deserves all praise for putting an end to an unwanted controversy. DDT profusely thanks the Chairman and all the concerned officers in the Board for this lovely New Year Gift to the Nation. Thousands of Show Cause Notices waiting in the wings are nipped in the bud - though this may not be really good news for the consultants, but then we all work for consistency and clarity and not confusion and litigation.
Notification NO. Dated: 31st December, 2008