Inclusion of SEZ clearances in export turnover for CENVAT credit refund allowed

The appellant successfully argued for the inclusion of exempted goods cleared to a Special Economic Zone (SEZ) in the total turnover of exported goods for calculating the refund of accumulated CENVAT credit. The Member (Judicial) relied on precedent and concluded that clearances to SEZ units should be treated as exports, entitling the appellant to a refund of Rs. 1,58,945. The impugned order was set aside, and the appeal was allowed with consequential reliefs due to the introduction of GST affecting cash refund availability.

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Issues:
- Refund of CENVAT credit for exported goods
- Inclusion of exempted goods in export turnover for refund calculation

Analysis:
1. The appeal involved a dispute regarding the refund of CENVAT credit for goods exported by the appellant. The appellant sought a refund under Rule 5 of the CENVAT Credit Rules, 2004, for an amount that was initially granted but later found to include an incorrect component related to exempted goods exported.

2. The issue centered around whether the value of exempted goods exported should be included in the total turnover of exported goods for calculating the admissible refund amount under Rule 5 of CCR, 2004. The original authority ordered recovery of the disputed amount along with interest, leading to the appellant filing an appeal before the First Appellate Authority, which was rejected, prompting the current appeal.

3. The appellant argued that all clearances made to a Special Economic Zone (SEZ) unit should be considered as exports, citing a relevant CBEC Circular and a judgment of the Hon'ble High Court of Bombay. The Departmental Representative, however, supported the findings of the First Appellate Authority.

4. Upon careful consideration, the Member (Judicial) noted that the key issue was whether the appellant could include the value of exempted goods cleared to SEZ in the total turnover of exported goods for determining the refund of accumulated CENVAT credit. It was established that the goods were manufactured in a Domestic Tariff Area (DTA) and cleared to an SEZ unit with eligible CENVAT credit availed.

5. Referring to the judgment in the case of Repro India Limited, the Member (Judicial) concluded that clearances to SEZ units are to be treated as exports, making the appellant eligible for the refund. Given the specific circumstances of the case and the unavailability of cash refund due to the introduction of GST, the appellant was granted the refund amount of Rs. 1,58,945 by way of cash refund, setting aside the impugned order and allowing the appeal with consequential reliefs.

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