2015 (11) TMI 704 - AT - Central Excise

Refund claim - Denial of unutilized CENVAT Credit - Notification no. 42/2001 C.E. (NT) dated 26.6.2001 - SEZ Unit - DTA Clearances - Held that - The refund claim under Rule 5 of the Cenvat credit Rules, 2004 is restricted and is not admissible in the eventuality, when the assessee claims rebate of input stage duty and also claims refund of un-utilized credit, as it will amount to refund of the same amount twice. However, in the case in hand, since the rebate claim has been sanctioned in respect of export of excisable goods, which is not in relation to rebate on input goods, in my considered view, denial of refund of input stage duty is not regally sustainable, in view of the fact that Rule 5 of the rules specifically provides for claiming refund of accumulated credit available in the books, which the assessee is not able to utilize, because of exportation of goods on which no central excise duty is leviable. - impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Interpretation of Rule 5 of the Cenvat Credit Rules, 2004 regarding refund of unutilized cenvat credit for goods supplied to SEZ units.

Analysis:
The appellant, engaged in manufacturing copper pipes and tubes, claimed refund of unutilized cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 for goods supplied to SEZ units. The appellant argued that such supply should be considered as exports, making them eligible for the refund. The Department, however, contended that Rule 5 only applies to physical exports, not goods supplied to SEZ units, and denied the refund claim. The appellant relied on the judgment of the Hon'ble Chhattisgarh High Court and a Circular issued by the CBEC to support their claim.

The Tribunal analyzed the SEZ Act and the definition of 'export' under Section 2(m), which includes supplying goods from the Domestic Tariff Area to a unit or developer in SEZ. The Tribunal noted that the SEZ Act prevails over other laws in case of conflict. It concluded that goods supplied to SEZ units should be considered as exports for refund of cenvat credit under Rule 5. The Tribunal also referenced a CBEC Circular and the judgment of the Chhattisgarh High Court to support its interpretation.

Regarding the denial of refund due to claiming rebate of input stage duty, the Tribunal clarified that such denial is not legally sustainable in this case. The Tribunal emphasized that Rule 5 allows claiming refund of accumulated credit not utilized due to the exportation of goods on which no central excise duty is leviable. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

In conclusion, the Tribunal's decision clarified the interpretation of Rule 5 in the context of goods supplied to SEZ units, aligning it with the definition of 'export' under the SEZ Act. The judgment emphasized the overriding effect of the SEZ Act and supported the appellant's claim for refund of unutilized cenvat credit in this specific scenario.