2013 (7) TMI 885 - CGOVT - Central Excise

Denial of rebate claim - clearance to SEZ cannot be treated equivalent to export to other countries - Held that - supplies made to SEZ are treated as export and such supplies are eligible for rebate claim under Rule 18 of the Central Excise Rules, 2002. Hence, the lower authorities have erred in holding to the extent that supplies to SEZ are not eligible for rebate benefit by ignoring the provisions of above said C.B.E. & C. Circulars. - applicant initially sought to supply the impugned goods to the SEZ Unit under Rule 19 of the Central Excise Rules, 2002. Subsequently on being pointed out above non-execution of UT-I, they paid Central Excise duties through debit entries in Cenvat account and claimed refund/rebate of such said duty. In these cases there is no allegation that said goods were not received by the SEZ unit. As such the payment of duty and export of goods is not in dispute. Therefore, rebate claim is required to be considered in accordance with law on merit in the light of above said C.B.E. & C. circulars. - Matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
Appeal against rejection of refund claims for duty paid on goods cleared to SEZ unit without executing required UT-I/Bond, eligibility for rebate/refund of duty under Rule 18 of Central Excise Rules, 2002 for goods cleared to SEZ, applicability of Board's circulars, reliance on judicial decisions by Commissioner (Appeals), and whether supplies to SEZ can be treated as exports for rebate purposes.

Analysis:
The revision applications were filed by M/s. Unimix Equipments (P) Ltd. against the rejection of refund claims for duty paid on goods cleared to SEZ unit without executing the required UT-I/Bond. The original authority rejected the claims as the goods were not cleared on payment of duty or under the UT-I/Bond. The Commissioner (Appeals) upheld the rejection, leading to the filing of revision applications before the Central Government.

The applicant contended that they followed Board's circulars dated 27-12-2006 and 19-3-2010, which were not considered by the Commissioner (Appeals). They argued that the circulars allowed rebate for supplies made from DTA to SEZ units. The Commissioner (A) had relied on a Tribunal decision and a High Court judgment, which the applicant claimed were not applicable to their case involving duty refund on goods exported to SEZ units under Rule 18 of the Central Excise Rules, 2002.

The Government observed that the rebate claims were rejected based on the premise that clearance to SEZ cannot be equated to exports to other countries, and there was no provision for rebate under Rule 18 for such clearances. However, the applicant cited Board's circulars to support their claim that supplies to SEZ should be treated as exports and are eligible for rebate under Rule 18.

Upon reviewing the case records and circulars, the Government found that supplies to SEZ are indeed treated as exports, making them eligible for rebate under Rule 18. The lower authorities erred in denying the rebate benefit to the applicant. The Government noted that the duty was paid, and the goods were exported to the SEZ unit without dispute, warranting a reconsideration of the rebate claim in line with the circulars and the law.

Consequently, the Government set aside the impugned orders and remanded the matter to the original authority for a fresh consideration based on the observations made. Both parties were to be given a reasonable opportunity for a hearing during the reconsideration process. The revision applications were disposed of accordingly.