SEZ unit entitled to refund of cenvat credit for clearances. Supplies to SEZ eligible under Central Excise Act.

The Tribunal upheld the Commissioner (Appeals) order allowing the refund claim of unutilized cenvat credit for clearances to a SEZ unit. It held that supplies to SEZ units are eligible for benefits under the Central Excise Act 1944 and related Rules, as clarified in CBEC Circulars and supported by case law. The Tribunal dismissed the Revenue's appeal, finding no error in the Commissioner's decision.

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Issues:
Refund of unutilized cenvat credit for clearances to SEZ unit under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:
The case involves an appeal against the Commissioner (Appeals) order allowing the refund claim of unutilized cenvat credit for clearances to a SEZ unit. The appellant contended that the refund is not admissible to DTA unit on clearances to SEZ units, as the SEZ Act is intended to benefit only SEZ units, and the deeming fiction of export under SEZ Act is exclusively meant for SEZ units. On the other hand, the respondent argued that supplies to SEZ are considered as physical exports for all purposes, as per Section 2(m) of SEZ Act, 2005, and SEZ is treated as located outside India. The respondent relied on SEZ Rules 2006 and CBEC Circulars to support their argument that supplies from DTA to SEZ unit are eligible for export benefits.

The learned AR submitted that the impugned order is not sustainable in law, emphasizing that the refund under Rule 5 of Cenvat Credit Rules 2004 is not admissible to DTA unit on clearances to SEZ units. The respondent's counsel countered this argument by stating that supplies made to SEZ are considered exports, as per SEZ Act, and are eligible for export benefits as per SEZ Rules 2006 and CBEC Circulars. The counsel relied on a CBEC Circular and a judgment to support their position that supplies to SEZ units are entitled to benefits under the Central Excise Act 1944 and related Rules.

The Tribunal upheld the impugned order of the Commissioner (Appeals) based on the arguments presented by the respondent's counsel. The Tribunal found that supplies made to SEZ units are eligible for all benefits available under the Central Excise Act 1944 and related Rules, as clarified in the CBEC Circular and supported by the judgment cited. Therefore, the Tribunal dismissed the appeal of the Revenue, concluding that there was no infirmity in the Commissioner (Appeals) order that warranted interference by the Tribunal.

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