2017 (11) TMI 13 - AT - Central Excise

Refund of unutilized CENVAT credit - finished products supplied to projects financed by Asian Development Bank (ADB) - export/deemed export or not? - Held that - goods cleared to a project financed by ADB, enjoying exemption in terms of notification No.108/95-CE dated 28.8.1995, are not specified under the category of deemed exports . Further, the authorities below in the impugned order, recorded that payment for such supply was not being received in foreign currency and no bill of export have also been prepared for the sale of such goods in India. Consequently, the supply to ADB project does not fall in the category of export / deemed export - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against rejection of refund claim of unutilised Cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 for supplies to projects financed by Asian Development Bank (ADB) under notification No.108/95-CE dated 28.8.1995.

Analysis:
The appellant, engaged in manufacturing excisable goods, claimed a refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004, amounting to ?4,19,249, for supplies to projects financed by ADB. The refund claim was rejected by authorities, leading to the appeal. The appellant contended that supplies to ADB projects should be deemed as exports, citing relevant case law. The appellant also argued that the supplies should be considered as 'deemed exports' under para 8.3 of EXIM Policy 2012-2013. However, the authorities noted that the supplies did not qualify as exports or deemed exports since payment was not received in foreign currency, and no bill of export was prepared. Consequently, the appellant was deemed ineligible for the refund under Rule 5 of the Cenvat Credit Rules, 2004.

The Tribunal reviewed the case laws cited by the appellant, which primarily dealt with refunds for clearances to 100% Export Oriented Units (EOUs) as 'deemed exports'. The Tribunal emphasized that the cited cases were not applicable in the present scenario, as the supplies to ADB projects did not fall under the category of 'deemed exports'. Therefore, the benefit of Rule 5 could not be extended to the appellant in this case. The Tribunal upheld the impugned order rejecting the refund claim, concluding that the supplies to ADB projects did not meet the criteria for refund under the Cenvat Credit Rules, 2004. Consequently, the appeal was dismissed, and the impugned order was upheld.

In summary, the judgment centered on the eligibility of the appellant for a refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 for supplies to projects financed by ADB. The Tribunal determined that the supplies did not qualify as exports or 'deemed exports' based on the absence of foreign currency payment and bill of export, thereby denying the appellant's refund claim. The decision was supported by the inapplicability of cited case laws pertaining to 'deemed exports' for supplies to 100% EOUs.