Cenvat credit refund denied for supplies to an ADB-financed domestic project treated as neither export nor deemed export.

Refund of unutilised Cenvat credit under Rule 5 was unavailable because supplies to an Asian Development Bank-financed project in India were not export or deemed export. The text notes that Rule 5 applies only where input services or inputs are used for final products cleared for export under bond or letter of undertaking, or for other categories expressly covered. The claimed deemed export treatment under para 8.3 of the EXIM Policy was not established, and the absence of foreign exchange realisation and a bill of export further supported the conclusion that the transaction was not an export clearance. The refund rejection was sustained.

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Issues: Whether supplies made to a project financed by the Asian Development Bank and cleared under Notification No. 108/95-CE could be treated as export or deemed export so as to qualify for refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004.

Analysis: Rule 5 permits refund of Cenvat credit only where the input or input service is used in the manufacture of final products cleared for export under bond or letter of undertaking, or in other categories specifically covered by the rule. The supplies in question were made to an ADB-financed project in India and were not treated as export. The claimed basis of deemed export under para 8.3 of the EXIM Policy 2012-2013 was examined, but goods cleared to such projects were not shown to be specified as deemed exports. The factual features noted below also supported the conclusion that the transaction was not an export transaction: no foreign currency realization and no bill of export.

Conclusion: The supplies did not amount to export or deemed export, and the appellant was not eligible for refund of Cenvat credit under Rule 5.

Final Conclusion: The rejection of the refund claim was sustained and the appeal failed.

Ratio Decidendi: Refund of Cenvat credit under Rule 5 is available only where the relevant clearance falls within the categories of export or other legally recognised deemed export situations, and a supply to an ADB-financed domestic project not so recognised does not qualify.

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