2016 (10) TMI 137 - AT - Central Excise

Refund of CENVAT credit in terms of Rule 5 of Cenvat Credit Rules, 2004 - SEZ - goods cleared to SEZ and availed Cenvat credit in respect of input used thereunder on the closure of the unit - whether the original authority was justified in holding that supplies made to SEZ is not exports and the refund is not admissible for the period prior to issue of amendment notification No. 50/08-CE(N.T.) dated 31/12/2008? - Held that - the decision in the case of B.J. Services Company Middle East Ltd. Versus C.C. (IMPORTS), Mumbai 2013 (11) TMI 793 - CESTAT MUMBAI relied upon. The supplies made to SEZ either prior to 2008 or thereafter has been considered as exports and consequently assessee is entitle for all the benefits and incentives which otherwise available to physical export of goods out of India including refund under Rule 5 of Cenvat Credit Rules, 2004 or Rule 18 of Central Excise Rules, 2002. Period of limitation - Held that - the refund is in respect of accumulated credit therefore limitation of one year shall not apply. Appellant entitled for the refund - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether supplies made to SEZ are considered exports for the purpose of claiming refund?
2. Whether the refund claim is time-barred?

Analysis:

Issue 1:
The appeal challenged an Order-in-Appeal passed by the Commissioner of Central Excise(Appeals), Mumbai, where the Revenue's appeal was allowed. The appellant cleared goods to SEZ and claimed a refund of the balance in the Cenvat account under Rule 5 of Cenvat Credit Rules, 2004. The adjudicating authority sanctioned the refund, considering the supplies to SEZ as exports, as per the SEZ Act, 2005. The Commissioner(Appeals) referred to the issue of whether supplies to SEZ are exports and the admissibility of refund prior to a specific amendment notification. The appellant argued that supplies to SEZ are treated as exports, citing various judgments. The Tribunal noted settled judgments that supplies to SEZ are considered exports, entitling the appellant to benefits and incentives similar to physical exports. The Tribunal upheld the Adjudicating authority's decision to allow the refund, setting aside the Order-in-Appeal.

Issue 2:
Regarding the time-bar issue, the Adjudicating authority found the refund claim not time-barred as it was in respect of accumulated credit, with the limitation of one year not applying. The Commissioner(Appeals) did not provide any findings on the time-bar issue. The Tribunal held that since the Revenue did not challenge the Commissioner(Appeals)'s decision on the time-bar issue, it had attained finality. Therefore, the time-bar issue could not be raised at that stage. Consequently, the Tribunal concluded that the appellant was entitled to the refund, as decided by the Adjudicating authority, and upheld the Order-in-Original. The appeal was allowed, and the impugned order was set aside.

In conclusion, the Tribunal's judgment clarified that supplies made to SEZ are considered exports, entitling the appellant to benefits and incentives similar to physical exports. Additionally, the Tribunal ruled that the refund claim was not time-barred, as decided by the Adjudicating authority, and upheld the Order-in-Original, allowing the appeal.