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2016 (3) TMI 711 - AT - Central ExciseDenial of refund claim under Rule 5 of CCR - denial of claim on the ground that supplies made to EOU and SEZs are not qualified under Rule 5 of CCR - Held that - On perusal of the OIO dt. 7.1.2011, there is no dispute on the fact that appellants are a EOU who supplied the goods to SEZs and EOUs under bond following the procedures. There are number of Tribunal and High Court decisions which have ruled that supplies made to SEZs and EOUs which are exported and manufactured by the assessee are entitled to all the benefits including the refund of credit on inputs services under Rule 5 of CCR. In this regard, we rely on the Hon ble Gujarat High Court decision in the case of CCE Vs NBM Industries (2011 (9) TMI 360 - GUJARAT HIGH COURT ) wherein the Hon ble High Court dismissed the Revenue appeal on this issue. Thus appellants are entitled for claiming refund under Rule 5 of CCR relying on Board s circular No.1001/8/2015-CX dt. 28.4.2015 held that supplies to SEZs are entitled to all benefits - Since the adjudicating authority has not examined the issue on merits, the impugned order is set aisde and matter is remanded to the adjudicating authority to process the refund claim on merits - Decided in favour of assessee by way of remand
Issues:
Denial of refund claim under Rule 5 of CCR for supplies made to SEZs and EOUs by an EOU. Analysis: The appeal challenges the denial of a refund claim under Rule 5 of CCR for supplies made by an EOU to SEZs and EOUs. The appellant, a manufacturer of carton boxes, supplied goods to SEZ units and claimed a refund on unutilized cenvat credit for a specific period. The adjudicating authority rejected the claim, stating that supplies to SEZs and EOUs do not qualify under Rule 5 of CCR. The Commissioner (Appeals) upheld this decision. The appellant argues that supplies to SEZs and EOUs, being exported, are entitled to benefits, including credit refunds under Rule 5. The appellant cites various decisions to support their claim. On the contrary, the respondent reiterates the findings of the impugned order, referencing the case of Sai Wardha Power Ltd. Vs CCE Nagpur, where it was held that an EOU cannot claim rebate. The key issue in the appeal is the eligibility of the refund claim under Rule 5 of CCR for inputs used in final products supplied to SEZs and EOUs. The Tribunal notes that supplies to SEZs and EOUs, when exported and manufactured by the assessee, are entitled to all benefits, including credit refunds on inputs services under Rule 5 of CCR. Citing the Hon'ble Gujarat High Court decision in CCE Vs NBM Industries, the Tribunal emphasizes that such supplies are eligible for refunds. The Tribunal also refers to relevant paragraphs of the decision to support its stance. Further, the Tribunal highlights a Division Bench decision of the Madras High Court and a decision of the Apex Court in Virlon Textile Mills Ltd. v. Commissioner of C. Ex., Mumbai, to support the appellant's claim. Additionally, the Tribunal mentions a recent decision where supplies to SEZs were allowed benefits, indicating that the appellant is entitled to claim a refund under Rule 5 of CCR. As the adjudicating authority did not assess the issue on merits, the impugned order is set aside, and the matter is remanded for processing the refund claim. The remand is specifically for determining the quantification of the refund, and the appeal is allowed in these terms.
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