2019 (11) TMI 1504 - CGOVT - Central Excise

Rebate Claim - rejection on the ground that the applicant did not file a Disclaimer Certificate from the recipient SEZ unit that they had not claimed drawback on the impugned goods - HELD THAT - The Government observes that Para 5 of Circular No. 29/2006-Cus., dated 27-12-2006 issued under F.No. DGEP/SEZ/331/2006 clearly stipulates that Supplies from DTA to SEZ shall be exempt from payment of any Central Excise duty under Rule 19 of Central Excise Rules, 2002. Similarly, such supplies shall be eligible for claim of rebateunder Rule 18 of Central Excise Rules, 2002 subject to the fulfillment of conditions laid there under. The provisions relating to exports under Central Excise Act, 1944 and rules made thereunder may be applied, mutatis mutandis, in case of procurement by SEZ units SEZ developer from DTA for their authorized operations. The applicant has supplied capital goods without payment of duty as the unit has claimed exemption under Notification No. 49-50/2003-C.E. (N.T.), dated 10-6-2003, which have been installed as fixtures by the SEZ unit. There was no requirement of any disclaimer from the SEZ unit in this case since the goods supplied are in the nature of capital goods on which no duty drawback is admissible - Moreover drawback is not admissible to a SEZ unit in terms of General Notes 8 (d) of C.B.I. C. Notification No. 103/2008-Cus. (N.T.), dated 29-8-2008 which superseded Notification No. 26/2003-Cus. (N.T.), dated 1-4-2003. Since the applicant s unit is located in Solan the officer holding the charge of erstwhile Assistant Commissioner of Central Excise Division, Mandi Gobindgarh under the current jurisdiction of Commissioner CGST, Shimla, is directed to decide the rebate claims in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 and after verification of the claim of the applicant that no drawback has been availed by him in respect of impugned goods - Application allowed by way of remand.

Summary

Issues:
1. Rejection of rebate claim by the adjudicating authority and Commissioner (Appeals) due to the absence of a Disclaimer Certificate from the recipient SEZ unit.
2. Interpretation of Circular No. 29/2006-Cus. and Rule 18 of Central Excise Rules, 2002 in relation to supplies from DTA to SEZ units.
3. Admissibility of duty drawback to a SEZ unit as per General Notes 8 (d) of C.B.I. & C. Notification No. 103/2008-Cus. (N.T.), dated 29-8-2008.

Analysis:
The case involves a Revision Application filed against the rejection of rebate claims by M/s. GMP Technical Solutions (P) Ltd. The applicant, engaged in manufacturing fabricated building materials, filed 24 rebate claims amounting to &8377; 35,00,083 under Rule 18 of Central Excise Rules, 2002 for duty paid on inputs used in goods supplied to a SEZ unit. The rejection was based on the absence of a Disclaimer Certificate from the SEZ unit, despite the applicant's compliance with all other conditions. The Commissioner (Appeals) upheld this decision, leading to the appeal.

During the hearings, it was revealed that no drawback claim had been sanctioned to the SEZ unit against the supplied goods. The Government referred to Circular No. 29/2006-Cus. and Rule 18 of Central Excise Rules, 2002, emphasizing that supplies from DTA to SEZ are eligible for rebate subject to specified conditions. It was argued that as the goods supplied were capital goods, no duty drawback was applicable, as per Notification No. 49-50/2003-C.E. The inadmissibility of drawback to a SEZ unit was highlighted as per General Notes 8 (d) of C.B.I. & C. Notification No. 103/2008-Cus.

The Government concluded that the requirement of a Disclaimer Certificate from the SEZ unit was erroneous. The adjudicating authority's mention of the applicant's declaration not to claim duty drawback further supported this. Consequently, the Government allowed the rebate claims amounting to &8377; 35,00,083 to the applicant. The case was directed to the officer in charge to decide the rebate claims and verify the non-availment of drawback by the applicant for the supplied goods.