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2017 (2) TMI 311 - AT - Central ExciseRefund of unutilized cenvat credit - whether clearances made to 100% EOU should be considered at par with exports of the goods out of country and consequently whether for such supplies, refund u/r 5 is admissible? Held that - as per the Rule 5 of CCR, no exclusion was provided to deemed export i.e. supplies made to 100% EOU therefore bare term Export includes export of goods out of India as well as deemed export - This very issue has been considered in detailed by the Hon ble Gujarat High Court in case of E.I. Dupont India Pvt Ltd 2014 (5) TMI 128 - GUJARAT HIGH COURT , wherein it was held that deemed export ie. Supplies made to 100% EOU is at par with the physical export and all the benefit otherwise available to the export out of India shall be mutatis mutandis applicable to the clearances made to the 100% EOU - refund u/r 5 is admissible to the clearances of goods made to 100% EOU - appeal allowed - decided in favor of appellant.
Issues involved:
Whether the appellant is entitled to a refund of duty/service tax paid on input/input services used in the manufacture of goods supplied to a 100% EOU. Analysis: The common issue in the appeals was whether the appellant is entitled to a refund for duty/service tax paid on inputs used in manufacturing goods supplied to a 100% EOU. The adjudicating authority initially granted the refund, considering the supply to a 100% EOU as deemed export, making the appellant eligible for a refund under Rule 5. However, the Ld. Commissioner(Appeals) denied the refund claim based on the Tribunal's decision in the case of Commissioner of Central Excise, Thane-I Vs. Tiger Steel Engg(I) Pvt Ltd. The appellant challenged this decision, leading to the current appeal. The appellant's counsel argued that the denial of the refund claim by the Ld. Commissioner(Appeals) was solely based on the Tribunal's decision in the Tiger Steel Engg(I) Pvt Ltd case, which contradicts various judgments, including those of high courts. These judgments established that export encompasses deemed export, such as supplies to a 100% EOU, making the refund under Rule 5 admissible. The appellant cited several cases to support this argument. On the contrary, the Revenue's representative reiterated the findings of the impugned order, emphasizing that as per the Tribunal's decision in the Tiger Steel Engg(I) Pvt Ltd case, clearances to a 100% EOU are not equivalent to exports. Therefore, the Commissioner (Appeals) rightfully denied the refund, stating that Rule 5 applies only when goods are physically exported out of India. After considering both sides' submissions, the Member (Judicial) found that the key issue was whether clearances to a 100% EOU should be treated similarly to exports of goods outside the country, thus determining the admissibility of a refund under Rule 5. The Member noted that Rule 5 of the Cenvat Credit Rules does not exclude deemed exports, such as supplies to a 100% EOU, from its scope. Referring to the judgment of the Hon'ble Gujarat High Court in the E.I. Dupont India Pvt Ltd case, it was established that deemed exports to a 100% EOU are on par with physical exports, entitling them to the same benefits. The Tribunal's decision in the Tiger Steel Engg(I) Pvt Ltd case was deemed not to be a good law as it did not consider the Gujarat High Court's ruling. Consequently, the Member ruled in favor of the appellant, allowing the appeals and granting any consequential relief in accordance with the law.
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