2021 (2) TMI 472 - AT - Central Excise

Refund of accumulated CENVAT Credit - goods have been supplied to a project awarded under ICB, treating such supplies to be deemed exports - export goods or not - Rule 5 of CENVAT Credit Rules, 2004 - N/N. 12/2012-CE (S No 336) - HELD THAT - the refund of the accumulated credit in terms of Rule 5 of the CENVAT Credit Rules, 2004 was admissible only, if the person claiming such refund was able to establish actual and physical export of the goods cleared by him for export under bond or against a letter of undertaking. These conditions are substantial and in case of non fulfillment of the same refund could not have been allowed. In view the various discussions as above we find that none of the decisions relied upon by the appellants decided the issue in their favour. Appeal dismissed - decided against appellant.

Summary

Issues Involved:

1. Admissibility of refund of accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004.
2. Interpretation of "export goods" under the Central Excise Act and CENVAT Credit Rules.
3. Applicability of deemed exports for refund claims.
4. Impact of Notification No. 27/2012-CE (NT) and subsequent amendments on refund claims.
5. Precedent value of previous judgments and their applicability to the current case.

Detailed Analysis:

1. Admissibility of Refund of Accumulated CENVAT Credit:

The appellants filed a refund claim of ?96,53,590/- for the period January 2015 to March 2015 under Rule 5 of the CENVAT Credit Rules, 2004. The Assistant Commissioner rejected this claim, and the Commissioner (Appeals) upheld the rejection. The core issue was whether supplies made under International Competitive Bidding (ICB) could be treated as exports for the purposes of Rule 5, which allows refunds for unutilized CENVAT credit on goods exported under bond or letter of undertaking.

2. Interpretation of "Export Goods":

The term "export" is defined under Section 2 of the Customs Act, 1962, as taking goods out of India to a place outside India. This definition was incorporated into the Central Excise Rules and CENVAT Credit Rules through notifications issued on 01-03-2015. The tribunal emphasized that the definition of "export goods" as per Rule 5 of the CENVAT Credit Rules, 2004, should be interpreted strictly and literally, meaning only physical exports qualify for refunds under this rule.

3. Applicability of Deemed Exports:

The tribunal examined whether deemed exports, such as supplies made under ICB, qualify for refunds under Rule 5. It was concluded that deemed exports do not meet the criteria for physical exports as required by Rule 5. The tribunal relied on several precedents, including the Hon'ble Supreme Court's decision in Dilip Kumar & Co., which mandates a strict interpretation of exemption and refund provisions in fiscal statutes.

4. Impact of Notification No. 27/2012-CE (NT) and Subsequent Amendments:

Notification No. 27/2012-CE (NT) dated 18.06.2012 and subsequent amendments clarified that refunds under Rule 5 are applicable only for physical exports. The tribunal noted that the amendments were clarificatory in nature and thus applicable retrospectively. This meant that even for periods before the amendments, only physical exports could qualify for refunds under Rule 5.

5. Precedent Value of Previous Judgments:

The appellants cited several cases where refunds were allowed for deemed exports. However, the tribunal distinguished these cases based on their specific facts and contexts. For instance, decisions involving supplies to Export Oriented Units (EOUs) were not directly applicable to the current case of supplies under ICB. The tribunal also noted that the decision in Om Metals Infra Projects Ltd., which supported the appellants' claim, did not independently analyze the issue and relied on precedents that were not directly on point.

Conclusion:

The tribunal concluded that the appellants' claim for a refund of accumulated CENVAT credit for supplies made under ICB did not meet the criteria for physical exports as required by Rule 5 of the CENVAT Credit Rules, 2004. The appeal was rejected, and the order of the lower authorities was upheld. The tribunal emphasized the need for strict interpretation of fiscal statutes and the specific conditions laid down for refunds under Rule 5.