Government rules supplies to SEZ as exports, granting rebate under Rule 18. Refund denial for duty paid to SEZ overturned. Fair hearing ensured.

The Government allowed the appeal, determining that supplies to SEZ are considered exports, entitling the applicant to rebate under Rule 18. The rejection of refund claims for duty paid on goods cleared to SEZ without executing the required UT-I/Bond was overturned. The case was remanded to the original authority for reconsideration in accordance with the law and circulars, ensuring both parties have a fair hearing in the process.

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Issues Involved:
Appeal against rejection of refund claims for duty paid on goods cleared to SEZ unit without executing required UT-I/Bond, eligibility for rebate/refund of duty under Rule 18 of Central Excise Rules, 2002 for goods cleared to SEZ, applicability of Board's circulars, reliance on judicial decisions by Commissioner (Appeals), and whether supplies to SEZ can be treated as exports for rebate purposes.

Analysis:
The revision applications were filed by M/s. Unimix Equipments (P) Ltd. against the rejection of refund claims for duty paid on goods cleared to SEZ unit without executing the required UT-I/Bond. The original authority rejected the claims as the goods were not cleared on payment of duty or under the UT-I/Bond. The Commissioner (Appeals) upheld the rejection, leading to the filing of revision applications before the Central Government.

The applicant contended that they followed Board's circulars dated 27-12-2006 and 19-3-2010, which were not considered by the Commissioner (Appeals). They argued that the circulars allowed rebate for supplies made from DTA to SEZ units. The Commissioner (A) had relied on a Tribunal decision and a High Court judgment, which the applicant claimed were not applicable to their case involving duty refund on goods exported to SEZ units under Rule 18 of the Central Excise Rules, 2002.

The Government observed that the rebate claims were rejected based on the premise that clearance to SEZ cannot be equated to exports to other countries, and there was no provision for rebate under Rule 18 for such clearances. However, the applicant cited Board's circulars to support their claim that supplies to SEZ should be treated as exports and are eligible for rebate under Rule 18.

Upon reviewing the case records and circulars, the Government found that supplies to SEZ are indeed treated as exports, making them eligible for rebate under Rule 18. The lower authorities erred in denying the rebate benefit to the applicant. The Government noted that the duty was paid, and the goods were exported to the SEZ unit without dispute, warranting a reconsideration of the rebate claim in line with the circulars and the law.

Consequently, the Government set aside the impugned orders and remanded the matter to the original authority for a fresh consideration based on the observations made. Both parties were to be given a reasonable opportunity for a hearing during the reconsideration process. The revision applications were disposed of accordingly.

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