Refund of unutilized CENVAT credit on DTA supplies to SEZ upheld as export treatment for Rule 5 purposes.

Supplies from the Domestic Tariff Area to a Special Economic Zone were treated as exports for the purpose of refund of accumulated CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004. The Tribunal held that authority relied on for export duty under the Customs Act operated in a different statutory context and could not deny refund under Rule 5. It also noted later decisions and Board circulars recognising entitlement to refund on such clearances. Refund was therefore admissible and the Revenue's challenge failed.

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Issues: Whether refund of unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004 is admissible in respect of clearances made from the Domestic Tariff Area to a Special Economic Zone.

Analysis: The Tribunal held that the reliance placed on the decision dealing with export duty under the Customs Act was in a different context and did not govern refund under Rule 5. It noted that later decisions had treated supplies from the Domestic Tariff Area to a Special Economic Zone as exports for the purposes of rebate and refund, and that the Board circulars also recognized entitlement to refund of accumulated credit on such clearances.

Conclusion: Refund under Rule 5 of the CENVAT Credit Rules, 2004 was held admissible for clearances made to a Special Economic Zone, and the Revenue's challenge was rejected.

Ratio Decidendi: Supplies from the Domestic Tariff Area to a Special Economic Zone are to be treated as exports for the purpose of refund of accumulated CENVAT credit under Rule 5, and a contrary reading based on a different statutory context cannot deny that benefit.

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