2015 (11) TMI 1553 - AT - Central Excise

Tribunal grants refund of cenvat credit for deemed exports under Cenvat Credit Rules

The Tribunal ruled in favor of the appellants, allowing the refund of accumulated cenvat credit for deemed exports under Rule 5 of the Cenvat Credit ... Refund claim - Rule 5 of Cenvat Credit Rules, 2004 - supply of goods under International Competitive Bidding governed under the provisions of Foreign Trade Policy as deemed export - accumulated cenvat credit available in their books of accounts - Held that:- the issue is no more res-integra. In view of the decision of Hon'ble Gujarat High Court in the case of C.C.E. vs. NBM Industries [ 2011 (9) TMI 360 - GUJARAT HIGH COURT] and also the decision of this Tribunal in the case of Apotex Pharmachem India Pvt. Ltd. vs. CCE, Bangalore [2015 (10) TMI 2353 - CESTAT BANGALORE], wherein it was held that the clearances made by one 100% EOU to another 100% EOU which are deemed exports are to be treated as physical exports for the purpose of entitling refund of unutilized Cenvat credit contemplated under the provisions of Rule 5 of the Cenvat Credit Rule, 2004. Therefore, the impugned order denying the benefit of refund to the appellants is not sustainable. - Decided in favour of appellant Issues:Refund of accumulated cenvat credit for deemed export under Rule 5 of Cenvat Credit Rules, 2004.Issue Analysis:1. Refund of Cenvat Credit for Deemed Export:The case involved the appellants engaged in manufacturing Hydel Gates and parts under Chapter 73 of the Central Excise Act, 1985, who entered into a contract with M/s. National Thermal Power Corporation (NTPC) for supply of goods exempted from Central Excise Duty under Notification No.6/06-CE. The dispute arose regarding the refund of accumulated cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004, as the authorities denied the refund benefit citing that Rule 5 applies only to physical exports and not deemed exports. The ld. Advocate for the appellants argued that supply under International Competitive Bidding recognized as deemed export by the Foreign Trade Policy should entitle the appellants to the refund. The Tribunal referred to its previous judgment in Apotex Pharmachem India Pvt. Ltd. case, where it held that deemed exports are eligible for refund under Rule 5. The Tribunal emphasized that the decision in Tricolite Electrical Indus. Ltd. case, relied upon by the authorities, was not applicable as the operation of the relevant order had been stayed by the Bombay High Court.2. Applicability of Previous Tribunal Decisions:The ld. Advocate for the appellants challenged the reliance on the Tricolite Electrical Indus. Ltd. case by the authorities, arguing that the decision was based on another Tribunal case, the operation of which had been stayed by the Bombay High Court. The Tribunal agreed with the appellants, stating that since the operation of the decision in Tricolite Electrical case was stayed, it could not be used to deny the cenvat credit refund due to the appellants. The Tribunal reiterated that the issue had already been settled in previous cases, including Apotex Pharmachem India Pvt. Ltd., where it was held that deemed exports are eligible for refund under Rule 5, emphasizing that the present dispute was no longer res-integra.Conclusion:The Tribunal, after considering the arguments from both sides and reviewing the records, held in favor of the appellants. It set aside the impugned order denying the refund benefit, stating that the appellants were entitled to the refund of accumulated cenvat credit for deemed exports under Rule 5 of the Cenvat Credit Rules, 2004. The Tribunal emphasized the settled position on the issue and the inapplicability of the decision relied upon by the authorities, ultimately allowing the appeals in favor of the appellants.