2024 (12) TMI 153 - HC - Central Excise

Refund of Cenvat Credit - whether for the purpose of refund of Cenvat Credit under the Cenvat Credit Rules 2004 supply of goods treated as export under the The Special Economic Zones Act of 2005 (SEZ Act) can also be treated as export for the purposes of the Cenvat Credit Rules and Central Excise Rules 2002? - HELD THAT - Since the orders under challenge were passed prior to 2015 the original adjudicating and the appellate authorities did not have the benefit of the circular dated 28 April 2015 wherein it is clarified that rebate of duty on goods cleared from Domestic Tariff Area to SEZ would be treated as export for the purposes of Cenvat Credit Rules and Central Excise Rules. Therefore in the interest of justice and by consent of both the parties the matter remanded back to the Appellate Authority to decide the issue afresh after considering the Circular dated 28 April 2015 and all the decisions which the parties wishes to rely upon. Appeal disposed off.

Summary

Issues:
Whether supply of goods treated as "export" under the Special Economic Zones Act can be considered as export for the purposes of refund of Cenvat Credit under the Cenvat Credit Rules and Central Excise Rules.

Analysis:
The judgment dealt with three matters that revolved around the common issue of whether goods supplied under the Special Economic Zones Act could be treated as exports for the purpose of refund of Cenvat Credit. The petitioners challenged various orders related to this issue, and the court decided to dispose of all three matters together.

The court noted that a circular issued by the Central Board of Excise and Customs clarified that goods treated as "export" under the SEZ Act would also be considered as export for the purposes of the Cenvat Credit Rules and Central Excise Rules. This circular aimed to address concerns raised by the trade regarding the availability of benefits under these rules for supplies to SEZs.

The judgment extensively discussed the relevant provisions of the SEZ Act, highlighting that supply of goods from the Domestic Tariff Area to an SEZ constitutes export under the Act. It emphasized that the SEZ Act takes precedence over any inconsistent provisions of other laws and deems an SEZ to be outside the customs territory of India.

Referring to past circulars and legal interpretations, the court reaffirmed that goods supplied from the DTA to an SEZ would continue to be considered as exports, entitling them to benefits like rebate under the Central Excise Rules. The court also acknowledged the reliance on certain decisions by both parties and agreed to allow the concerned authorities to examine those case laws on remand.

Ultimately, the court remanded all three matters back to the respective authorities for fresh adjudication in light of the 2015 circular clarifying the treatment of goods supplied to SEZs as exports. The orders challenged by the petitioners were set aside, and the matters were to be reconsidered with the circular and any relevant case laws presented by the parties.

In conclusion, the court allowed the petitions, remanded the matters for fresh adjudication, and quashed the order passed by the Tribunal in one of the appeals, directing it to decide the case afresh. The concerned authorities were instructed to pass reasoned orders after providing an opportunity for a personal hearing, leaving all parties' contentions open. The writ petitions and appeal were disposed of with no order as to costs.