Deemed exports between 100% EOUs treated as physical exports for Cenvat credit refund under Rule 5.

Clearances from one 100% export-oriented unit to another 100% export-oriented unit, though treated as deemed exports, are to be regarded as physical exports for refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004. The court applied binding precedent on the same factual position and found no distinguishing feature, so the Tribunal's view was not interfered with. The principle affirmed is that deemed export between two 100% EOUs can satisfy the export requirement for Rule 5 refund where precedent directly covers the issue.

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Issues: Whether clearance by one 100% export-oriented unit to another 100% export-oriented unit, treated as deemed export, is to be regarded as physical export for the purpose of refund of unutilized Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004.

Analysis: The appeal turned on the applicability of the earlier decision holding that clearances between two 100% EOUs, though deemed exports, are to be treated as physical exports for the purpose of refund under Rule 5. The Court also applied the principle that where the factual position is covered by binding precedent, there is no reason to interfere with the Tribunal's order. On the facts, the issue was found to be squarely covered by the earlier decision and no distinguishing feature was shown.

Conclusion: The issue was answered in favour of the assessee. Clearance from one 100% EOU to another 100% EOU is to be treated as physical export for refund of unutilized Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004.

Ratio Decidendi: Deemed exports between 100% EOUs are to be treated as physical exports for the purpose of refund of unutilized Cenvat credit under Rule 5 when the governing facts are covered by binding precedent.

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