2016 (2) TMI 992 - AT - Central Excise

Appellant wins appeal for duty refund on inputs supplied to 100% EOU

The Member (Judicial) found in favor of the appellant in the appeal against the rejection of refund claims for duty paid on inputs used in manufacturing ... Refund of Cenvat credit - deemed export versus actual export - removal under CT-3 certificate - exemption scheme for supplies to EOU under Notification No.22/2003-CE - Rule 5 of Cenvat Credit Rules, 2004 - proof of export requirement (shipping bill/BL) in refund claimsRefund of Cenvat credit - removal under CT-3 certificate - deemed export versus actual export - Rule 5 of Cenvat Credit Rules, 2004 - Entitlement to refund of Cenvat credit on inputs used in manufacture of goods cleared to a 100% EOU under CT-3 certificate without payment of duty - HELD THAT: - The Tribunal found that refund claims for the stated quarters were wrongly rejected by the Commissioner (Appeals) on the ground that the clearances to the 100% EOU under CT-3 certificates amounted only to deemed export and that absence of shipping bills or bills of lading precluded grant of refund. Relying on the decision of the Hon'ble Gujarat High Court in Commissioner of Central Excise & Customs v. NBM Industries, the Tribunal held that refund of Cenvat credit is available in respect of inputs used in manufacture of goods cleared by a DTA manufacturer to a 100% EOU under the scheme even if the EOU subsequently exports the goods, and that denial solely on the basis of deemed export treatment and absence of conventional export documentation was not justified. Applying that precedent, the Tribunal concluded that the Commissioner (Appeals) erred in rejecting the refund claims and directed grant of refund with interest in accordance with the Rules. [Paras 4, 8]Refund claims for the quarters specified are allowed; impugned order set aside and refund to be granted by the Adjudicating Authority within 30 days with interest as per Rules.Final Conclusion: Appeals allowed; refund of Cenvat credit in respect of inputs used for clearances to 100% EOU under CT-3 for the quarters July, 2006 to September, 2006 and October, 2005 to December, 2005 is to be granted with interest by the Adjudicating Authority within 30 days. Issues:- Appeal against Order-in-Appeal No. 229-230-CE/APPL/NOIDA/2009 dated 28/08/2009.- Refund claim filed for duty paid on inputs used in manufacturing goods supplied to 100% EOU.- Rejection of refund claims by Ld. Commissioner (Appeals), Central Excise, Noida.- Interpretation of export under Central Excise Act & Customs Act.- Application of Notification No. 22/03-CE for exemption of Central Excise Duty.- Precedent set by Hon'ble Gujarat High Court regarding refund of Cenvat credit.Analysis:The appellant, engaged in manufacturing auto components, filed two appeals against the Order-in-Appeal dated 28/08/2009. The appeals were related to the rejection of refund claims amounting to significant sums for duty paid on inputs used in manufacturing goods supplied to a 100% EOU during the period of July 2006 to September 2006. The Ld. Commissioner (Appeals) rejected the claims, citing that the goods were cleared to the EOU without payment of duty, and the subsequent export was deemed export, lacking proof of actual export as per the Central Excise Act and Customs Act.The appellant argued that Notification No. 22/03-CE provided an exemption for Central Excise Duty when goods were brought for export into the EOU, subject to specific conditions. The appellant contended that the form CT-3, a prescribed certificate for removal of excisable goods under bond, was utilized in compliance with the notification. Additionally, the appellant relied on a ruling by the Hon'ble Gujarat High Court in the case of Commissioner of Central Excise & Customs v/s NBM Industries, where it was held that refund of Cenvat credit was available for inputs used in goods cleared to a 100% EOU, even in cases of deemed export.After considering the arguments, the Member (Judicial) found in favor of the appellant, citing the precedent set by the Hon'ble Gujarat High Court. It was held that the Commissioner (Appeals) erred in rejecting the refund claim, and the impugned order was set aside. The appellant was directed to be granted the refund by the Adjudicating Authority within 30 days, with interest as per rules upon receipt of the order.