SOMESH ARORA :

1. None appeared for the appellant. The matter has been coming up on the board and this is the fifth time, therefore is taken up for disposal on merits.

2. Heard the learned AR. It is the view of the department that in the instant case, matter relates to supplies made to SEZ by DTA unit, specially to SEZ developers, the Cenvat credit was sought to be denied to the supplier under Rule 6 (6) of the Cenvat Credit Rules, 2004 on the ground that during the material time no exemption was available to the appellant and they were required to reverse the credit to the extent the supplies made to SEZ developers. To emphasize the issue as well as the view of the department, Para 8 to 18 of the impugned order are highlighted. The same is reproduced below:

“8. In this regard, I observe that prior to 31.12.2008, in terms of the said Rule 6(6)(1) of Cenvat Credit Rules, 2004, "the provisions of sub-rules (2), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty are cleared to a unit in a SEZ." This Rule was further amended vide Notification No. 50/2008-CE(N.T.) dated 31.12.2008, The Notification is reproduced herein below

Notification No. 50/2008-Central Excise (N.T.)

New Delhi the 31 December, 2008

G.SR. (E)- In exercise of the powers conferred by section 37 of the Central Excise Act 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:

(1) (1) These rules may be called the CENVAT Credit (Third Amendment) Rules, 2008

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the CENVAT Credit Rules, 2004, in rule 6, in sub-rule (6), for clause (1), the following clause shall be substituted, namely:-

"(i) cleared to a unit in a special economic zone or to a developer of a special economic zone for their authorized operations, or "

9. A plain reading of the above Notification clearly shows that the notification would come into force on the date of their publication in the official Gazette. The date of their publication is 31.12.2008. Adopting the principles of plain reading and strict interpretation of statute by plain words, the benefit envisaged in the said Rule 6(6) of Cenvat Credit Rules, 2004 would be extended to supplies to SEZ Developer only from 31.12.2008 and not retrospectively as contended by the appellant. The appellant has relied upon the case of Sujana Metal products Ltd 2011 (273) ELT 112 [Tri-Bangalore), wherein the Hon'ble Tribunal has held that amendment carried out by Notification No. 50/2008- CE (NT) dated 31.12.2008 was clarificatory in nature and applies with effect from 10.09.2004. The case of Sujana Metals relied upon the case of WPIL Ltd 2005 (181) E.LT. 359 (S.C.), Indian Tobacco Association 2005 (187) ELT 162 (SC) and Zile Singh Vs State of Haryana 2004 (8) SCC 1 [LQ/SC/2004/1181 ;] ">2004 (8) SCC 1 [LQ/SC/2004/1181 ;] [LQ/SC/2004/1181 ;] and the SEZ Act and some Circulars (relating to SEZ and export) to hold the said amendment to be of retrospective in nature.

10. I find that in the case of WPIL Limited, the notification was held to be retrospective in nature because in that case it was the consistent policy of the Government of exempting parts of power driven pumps utilized by the factory within the factory premises vide notification, however while consolidating several notifications and issuing composite Notification No. 46/94-CE dated 11.03.1994, the said item got omitted though exemption in respect of said item which was operative earlier was neither withdrawn nor revoked. The policy remained as it was and in view of demand being made by the Department, a representation was made by the industries and on being satisfied, the Central Government issued a clarificatory Notification No. 95/94-CE dated 25.04.1994. It was not a new notification granting exemption for the first time in respect of parts of power driven pumps to be used in the factory for manufacture of pumps but clarified the position and made the position explicit which was implicit. In that context, the notification 95/94-CE was held to be clarificatory. Whereas in this case, SEZ developer was never included in the said exclusion clause of Rule 6(6) prior to 31.12.2008. In the case of Indian Tobacco Association (supra), the question of interpretation of word 'substitution' appearing in the amendment of a notification extending the scope / benefit of DEPB to various additional port/ICD was involved. In the facts of that case, initially under the DEPB scheme, Inland container port was not included in list of ports of registration. On representation from association of exporters, name of one such port substituted' in the notification. It was held that the substitution would have retrospective effect from date of original notification on the ground mainly that (i) it was not stated expressly to be prospective (i) only an obvious mistake was corrected without recourse to facility in the notification of permission from any other port and (ii) the substituted port was otherwise eligible for benefit and all along had been granted duty exemption. In the case of Zile Singh (supra) also the effect of an amendment in the Haryana Municipal Act, 1973 by Act No. 15 of 1994 whereby the word "after" was by the word "upto" was considered by the Hon'ble Court and held to be retrospective in nature. The ratio of these cases is not applicable to the case in hand being involving a distinguishable facts and circumstances. In this case, the amendment in the said notification 50/2008-CEINT) has been brought in the Statute itself by bringing SEZ developers within the ambit of Rule 6(6)ü) ibid, which was not eligible to the benefit otherwise before, unlike in the cases of WPIL Ltd, Indian Tobacco and Zile Singh. It is admitted fact that SEZ developer is clearly distinct from SEZ unit under SEZ Act and Rules also. Moreover, unlike in those cases, the amending notification No. 50/2008-CENT) which brought SEZ developer also within the ambit of Rule 6(6)) ibid specifically spelt out in para (1) thereof that the amendment shall have prospective effect only.

11. I do not find any merit in the arguments of the appellant regarding clarificatory nature of the said amendment. I find that a substantive amendment has been made in the legal provision vide notification no. 50/2008- CEINT) dated 31.12.2008 by providing the benefit of Rule 6(6) to supplies made to SEZ developers by addition in Rule 6(6)(i). The facts and background of the present case is clearly distinguishable. Moreover, the wordings and the date of effect provided in para 1 of the said notification no. 50/2008-CE(NT) clearly restrict its application only with effect from 31.12.2008 and therefore it cannot be held to be retrospectively applicable.

12. Regarding the intent of the legislature derived by the Hon'ble Tribunal in Sujana Metal case on the basis of CBEC circulars also appear misplaced as the same does not support the case of the appellant. It is settled law that the intention of the legislature has to be understood from the wordings used in the legislation. In a plethora of decisions of the Hon'ble Supreme Court and various High Courts it is categorically held that any statutory amendment of substantive nature in the absence of any intention to the contrary, will have only prospective effect. I rely upon the cases of M/s Jay Mahakali Rolling Mills - 2007 (215) ELT 11 (SC), Spice telecom 2006 (203) ELT 538 (SC) [LQ/SC/2006/967] , Union of India v. Ganesh Das Bhojraj - 2000 (116) E.LT. 431 (S.C.), M/s L & T Limited - 2000 (119) ELT 51 (T-LB), Mahindra & Mahindra Limited - 2007 (211) ELT 481 (T-Mum) and M/s Doon Institute of Information & Technology P Limited- 2008 (12) STR 459 (T-Del) to hold that the Notification No. 50/2008-CE (NT) is neither clarificatory nor retrospective and accordingly reject the plea of the appellant on this score. In the case of L&T Ltd 2000 (119) ELT 51 (T-LB), similar amendment was made in the erstwhile Central Excise Rules, 1994 [Modvat Credit Rules] vide a notification in 1992 to allow credit in respect of goods cleared to FTZ or EOU in terms of Rule 57C. The Tribunal held the said amending notification to be prospective in nature. The ratio of that case is squarely applicable to the case in hand. In the present case, the Central Government, in exercise of the powers conferred by Section 37 of the Central Excise and Salt Act, 1994, amended Rule 6(6) by issuing Notification No. 50/2008-CE(NT) dated 31.12.2008 and declared that this amendment shall come into force on the date of its publication in the Official Gazette. I accordingly reject the plea of the appellant.

13. Further to find the intention of the legislature in this regard, I place reliance upon the Circular dated 03/04/2008 issued by the ADG(EP), Govt. of India which clarified without any ambiguity that cenvat credit is not available for inputs used in the finished product supplied to developer of SEZ in terms of 6(6) of CENVAT Credit Rules, 2004. A step further, Government issued a Notification 3/2011-CE(NT) dated 01.03.2011 vide which Sub Rule (6A) was inserted into Rule 6 of CCR to provide that "The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the taxable services are provided, without payment of service tax, to a Unit in a Special Economic Zone or to a Developer of a Special Economic Zone for their authorised operations". Subsequently, the said Notification No. 3/2011-CE(NT) was given retrospective effect w.e.f. 10.02.2006 vide retrospective amendment through Section 144 of Finance Act, 2012 and Schedule VIII thereto. These provisions are reproduced herein below:-

"144. (1) In the CENVAT Credit Rules, 2004, made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise Act, 1944, (1 of 1944) sub-rule (64) of rule 6 as inserted by clause (ix) of rule 5 of the CENVAT Credit (Amendment) Rules, 2011, published in the Official Gazette vide notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.SR. 134(E), dated the 1" March, 2011 shall stand amended and shall be deemed to have been amended retrospectively, in the manner specified in column (2) of the Eighth Schedule, on and from the date specified in column (3) of that Schedule, against the rule specified in column (1) of that Schedule”

(2) Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done, on and from the 10th day of February, 2006, relating to the provisions as amended by sub-section (1), shall be deemed to be and deemed always to have been, for all purposes, as validly and effectively taken or done as if the amendments made by sub-section (1) had been in force at all material times.

(3) For the purpose of sub-section (1), the Central Government shall have and shall be deemed to have the power to make rules with retrospective effect as if the Central Government had the power to make rules under section 37 of the Central Excise Act 1944, (1 of 1944) retrospectively, at all material times.”

THE EIGHTH SCHEDULE

(see Section 144)

Provisions of CENVAT Credit Rules, 2004 to be amended	Amendment	Period of effect of amendment
(1)	(2)	(3)
Sub Sub-rule (6A) of rule 6 of the CENVAT Credit Rules, 2004 as inserted by CENVAT Credit	In the CENVAT Credit Rules, 2004, in rule 6, after sub- rule (6), the following sub- rule shall be inserted with	From 10th February, 2006 to 28th February, 2011
(Amendment) Rules, 2011 vide notification number G.S.R. 134(E), dated the 1st March, 2011 [3/2011- Central Excise (N.T.). dated the 1st March, 2011.	effect from the 10th day of R. February, 2006, namely:- "(6A) The provisions of sub- rules (1), (2), (3) and (4) shall not be applicable in case the taxable services are provided, without payment of service tax, to a Unit in a Special Economic Zone or to a Developer of a Special Economic Zone for their authorised operations."

14. The above retrospective amendment carried out to provide the benefit of Rule 6(6A) of CCR w.e.f. 10.02.2006 to the supplies made to SEZ developer clearly indicates the intent of the legislature to restrict the retrospective operation in respect of service tax credit only and not to the input credit as argued by the appellant in absence of any similar amendment or clarification issued by the department in respect of notification no. 50/2008-CE(NT). These facts can only lead to the obvious conclusion that the said Notification 50/2008-CE(NT) has not been accorded any retrospective effect. It may be noted that the above Circular dated 03/04/2008 of ADG(EP) and Section 144 of Finance Act, 2012 [giving retrospective amendment to notification No. 3/2011- CE(NT)] were not available before the Hon'ble Tribunal while deciding the case of Surana Metal, relied upon by the appellant. These two crucial facts could have definitely led to a different decision in the case of Surana Metal (supra). In view of several judgments of Hon'ble Supreme Court, Larger Bench of the Tribunal holding the said kind of amendment as prospective in nature and the above Circular and retrospective amendment etc, I beg to differ from the decision in the case of Surana Metal and hold that the Notification No. 50/2008-CE(NT) dated 31.12.2008 being prospective in nature would apply w.e.f. 31.12.2008 only. Moreover, in the case of Surya Roshini Ltd (supra) the case of Surana Metal case was also contradicted. Consequently, the supply made to SEZ developer cannot get the benefit of exclusion under Rule 6(6) of CCR prior to 31.12.2008. Accordingly, I hold that the demand raised in the impugned order is sustainable on merits.

15. The appellant has alternatively contended that their case is covered under clause (v) of Rule 6(6) of CCR as the supply to SEZ developer constitutes export under bond. The main point of contention of the appellant rest on the issue whether or not the supply to SEZ developers would be construed as EXPORT (more particularly as physical export of goods to a place outside India). I rely upon the decision of Honourable High Court of Gujarat in the case of M/s ESSAR Steel Limited vs. UOI reported in 2010(249) E.L.T. 03 (GUJ -HC), wherein the context of the term "export" contained in Customs Act vis-à-vis SEZ Act has been clarified. As per the verdict in Para 41.3.1. and 41.3.2. of the judgment,

"The term "export" having been defined in the Customs Act, 1962, for the purpose of that Act, there is no question adopting or applying the meaning of the said term under another enactment for any purpose of levying duty under Custom Act, 1962 In other words, a definition given under an Act cannot be displaced by a definition of the same term given in another enactment, more so, when the provisions of the first Act are being invoked. Even in the absence of a definition of the term in the subject statute, a definition contained in another statute cannot be adopted since a word may mean different things depending the setting and context."

"The movement of goods from Domestic Tariff area to the Special Economic has been treated as export by a legal fiction created under the SEZ Act, 2005. A legal Zone fiction is to be restricted to the statute which created it."

The said decision of the Hon'ble High Court has also been upheld by the Hon'ble Supreme Court as reported at 2010 (255) ELT A115 (SC). Similarly, Hon'ble Karnataka High Court in the case of M/s Shyamaraju & Co. India P Ltd 2010 (256) ELT 193 (Kar) and in M/s Biocon Limited -2011 (267) ELT 28 (Kar) [LQ/KarHC/2011/146] also held that the definition of 'export' under SEZ Act cannot be adopted for the purpose of Customs Act. Moreover, in the case of CCE, Thane-1 V/s The Tiger Steel Engineering (I) Pvt. Ltd. 12010-TIOL1256-CESTAT-MUM] the term 'export' has been further clarified regarding supply of goods to SEZ, it held in Para 11 as follows:-

……………"However, the question arises as to whether such supply of goods to SEZ units was an 'export. At no time was the term 'export defined under the Central Excise Act or any Rules framed there under. The definition of "export" given under the Customs Act has been traditionally adopted for purposes of the Central Excise Act and Rules there under. Therefore, in the absence of a definition of 'export under the Central Excise Act, the Central Excise Rules or the CENVAT Credit Rules 2004, we hold that for purposes of the CENVAT Credit Rules, 2004, one should look for its definition given under the Customs Act. The fictionalized definition of 'export' under Section 2(m) (i) of SEZ Act cannot be looked for as it purports only to make the SEZ unit an exporter In other words, the term 'export used in Rule 5 of the CENVAT Credit Rules, 2004 stands for export, which is 'physical export out of the country, envisaged under the Customs Act. We take this view because, as we have already indicated, anybody other than SEZ unit cannot be allowed to claim any benefit under the SEZ Act/Rules."

16. The ratio of the judgments is squarely applicable to the instant case. Moreover, the clearances from the DTA to a 100% EOU are also deemed as export under Foreign Trade Policy and DTA Unit is entitled to all benefits from duty against said supplies to 100% EOU. However, still the supplies made to 100% EOU have been specifically excluded from the application of Rule 6(1) to 6(4) ibid. This clearly reveals the intention of the legislature in allowing credit on inputs used in the manufacture of goods cleared to SEZ, EOU, STP, FTZ, EHTP etc. but not in respect of the same if cleared to SEZ developers prior to 31 12.2008. The definition of 'export' contained in Section 2(m) of SEZ Act, 2005 has to be treated applicable only in relation to the issues relating to SEZ Act and Rules made thereunder and the same cannot be applied to Cenvat Credit Rules, 2004, unless it is expressly mentioned in both the enactments. Neither I find any stipulation in the Cenvat Credit Rules, 2004 nor is there any argument from the appellant to hold that the provisions of SEZ Act shall be applicable to Cenvat Credit Rules, 2004. The Cenvat Credit Rules, 2004 is a separate piece of legislation made by the Legislature under Central Excise Act, 1944 with a specific purpose to allow credit of duty/tax paid on the input or input services to remove cascading effect and laid specific condition for availing the benefit of the same with their wisdom. Though Rule 18 and 19 of Central Excise Rules, 2002 have been made applicable to supplies of goods to SEZ units for the purpose of rebate vide Circular No. 06/2010-Cus. dated 19.03.2010 and 29/2006-Cus dated 27.12.2006 by the Government with specific and restrictive purpose only. The same cannot be made applicable to the cases falling under the ambit of a different statute altogether having different provisions and purpose of their enactment. Moreover, no such clarification treating supplies of goods to SEZ developer as 'export' under Cenvat Credit Rules, 2004 has been brought by the appellant in their favour for consideration. In absence of which and in view of the findings of the Hon'ble High Court of Gujarat in the case of Essar Steel Ltd supra, the contention that the supply of goods to SEZ developers amounts to 'export' (physical export) of goods under bond as covered under clause (v) of Rule 6(6) of CCR, 2004 is liable to be rejected.

17. I also find that if the contention of the appellant is accepted for the sake of argument, there was absolutely no need to specify clearances of goods to SEZ unit or 100% EOU or STP or EHTP in clauses (i) to (ii) of the said sub-rule as the clearances to 100% EOU, STP or EHTP are also deemed as export for the purposes of Foreign Trade Policy. The very existence of specific and separate exclusion provided in the said clauses (i) to (i) of Rule 616) ibid by the Legislature confirms the intent of the legislature to allow Cenvat credit facility in respect of restricted nature of transactions as envisaged therein. The rule makers in their wisdom have specifically and additionally included these obviously considering their distinguishable identities from that of physical export i.e. covered under clause (v) ibid. It is settled law that in case of any ambiguity in the statute, the intent of the legislature shall have to be looked into. I find that there is no ambiguity in the provisions of Rule 6(6) of Cerivat credit Rules as it covered both clearances for export under bond and clearances to SEZ unit or EOU as two different categories in the same rule. This also. identifies the intent of the legislature to provide exemption from the application of Rule 6(1) to 6(4) of CCR, 2004 to the clearances to SEZ unit specifically to distinguish it from the clearances for export under bond. Had there been the intent of legislature to consider supplies to SEZ, EOU or EHTP/STP as same or similar to physical export under bond, as contended by the appellant, there was no necessity of specifying them separately under the said clauses (i) to (i) ibid. In the absence of such specific provision it cannot be deemed that the goods cleared to SEZ units/developers would be treated as export under bond. I find that the appellant is trying to read something which is not provided in the statute. This is not permissible while interpreting a statute as per settled law. I place reliance on the following cases:

(i) In the case of Dharmandra Textile Processors vs. Union of India reported in 12008 (231) ELT.3 (S.C.)], the Apex Court held that :-

……“it is a well settled principle in law that the court cannot read anything into a statutory provision or a stipulated condition which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent".

(ii) The above views have been expressed by the Honourable Supreme Court in the case of Novopan India Ltd vs. CCE. reported in (1994(73) ELT.769 (S.C.). holding that ;

"a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification"

(iii) Further, in case of CCE vs. Sunder Steels Ltd., reported in [2005(181) ELT. 154 (SC.)) the Apex Court has also held that :

“the Notification has to be interpreted on its wording No words, not used in the notification can be added"

(iv) Also, the Supreme Court in the case of Rajasthan Spg. & Wvg Mills vs. CCE reported in [1995 (77) ELT.474 (SC)) observed that :

"since it was a case of exemption from day, there was no question of any liberal Construction to extend the term and scope of the notification as such exemption notification must be strictly construed and the assessee should bring himself squarely within the ambit of the notification to which no extended meaning can be given to At the items by enlarging the scope of exemption granted by the notification”.

18. In view of the above Apex Court's decisions, the interpretations have to be restricted only to the words of the statute and notification. Hence, the credit facility extended under the Notification No.50/2008-CE to clearances to SEZ Developers which were not specifically mentioned in the said rule prior to 31.12.2008 is applicable only wef. 31.12.2008. Hence the argument of the appellant that the supplies to SEZ developer are export under bond and therefore covered under clause (v) ibid does not have any force and is therefore liable to be rejected. Therefore, I find that the denial of Cenvat credit availed in respect of supply without payment of duty to the SEZ Developers prior to 31.12.2008 is legally maintainable. I accordingly do not find any infirmity in the impugned order.”

3. It is thus clear from the forgoing discussion that Notification No. 50/2008-CE (NT) specifically provided benefit to SEZ, came into existence only on 31.12.2008 and there was no way having its retrospective application. Other issues regarding export and all have also been elaborated by Commissioner (Appeals).

4. In view of above forgoing, this Court finds no merit in the appeal. Accordingly, the order of the Commissioner (Appeals) is upheld. The appeal is dismissed.

5. Dictated and pronounced in the open court.