Clearance to SEZ Developers - Amendment Retrospective
THIS issue is a classic example of how Revenue wastes its own time and that of the courts and causes precious loss of time, money and peace to the assessees - for no good reason.
It is the declared policy of the Government that clearances to SEZ are not dutiable, as SEZs are treated as foreign territory and clearances to them are as good as exports. There was a time when cases were booked by DRI and DGCEI for the same clearances, once under the Customs and again under Central Excise.
As per Rule 6(6) of the CENVAT Credit Rules, 2004, the provisions of sub-rule (1), (2), (3) and (4) were not applicable in case the excisable goods removed without payment of duty (1) cleared to a unit in SEZ. [Exempted and dutiable goods - obligations]
This was amended by Notification No. 50/2008 - CENT dated 31.12.2008 to stipulate that these provisions will not apply to goods cleared to a unit in SEZ or to a developer of SEZ for their authorized operations. [ Developer was added]
So, the confusion about clearances to SEZ developers was sought to be put to an end. But things don't end like that in Revenue. Board by a private letter in F.No.267/52/2008-CX dated 7/1/2009, clarified that the amendment was prospective and would be applicable only from the date of the notification. So, the period prior to 31 st December 2008, was a happy issue for dispute. (any good reason to deny the benefit for the period prior to 31.12.2008?).
Show Cause Notices flew in all directions and dutiful Commissioners confirmed demands merrily.
But the Bangalore Bench of the Tribunal emphatically held that the amendment had retrospective effect in 2011-TIOL-1173-CESTAT-BANG.
Following the Bangalore decision, the Delhi Bench of the Tribunal in 2012-TIOL-740- CESTAT-DEL.
Did the controversy end? Revenue disputes are not allowed to settle that easily. Against the Bangalore Tribunal order, the Revenue took the matter to the AP High Court, where it is pending.
And against the Delhi Bench order, the Revenue appealed to the Chattisgarh High Court at Bilaspur. Three weeks ago, the Chattisgarh High Court gave an emphatic judgement that the amendment was indeed retrospective.
Will the Revenue keep quiet at least now or will they take it to the Supreme Court? Why are they so determined to frustrate the Government policy?
Please see the Chattisgarh High Court order in
Please also see , , and