SEZ export clearances preserve Cenvat refund entitlement for accumulated credit under Rule 5 despite later notifications.

Clearances from DTA to SEZ units were treated as export clearances under the SEZ Act, 2005, which deems supply to an SEZ as export and gives the Act overriding effect; on that basis, accumulated Cenvat credit refund under Rule 5 of the Cenvat Credit Rules, 2004 remained available. The Board circular also confirmed that the refund benefit continued for DTA clearances to SEZ even after the 2015 notifications. Relying on its earlier view on export-oriented supplies, including mega power project clearances, the Tribunal held that the contrary approach of the Commissioner (Appeals) could not stand and that refund was admissible.

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Issues: Whether refund of accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 was admissible for clearances made to Special Economic Zone units and Mega Power Projects.

Analysis: The clearances to SEZ units were treated as export clearances under the SEZ Act, 2005, particularly in view of the statutory scheme defining supply from DTA to SEZ as export, conferring overriding effect on the SEZ Act, and deeming an SEZ to be outside the customs territory of India. The Board circular clarified that the benefit of refund of accumulated Cenvat credit remained available for DTA clearances to SEZ even after the 2015 notifications. The Tribunal also relied on its earlier decision recognising refund entitlement for clearances linked to similar export-oriented supplies, including mega projects, and held that the contrary view of the Commissioner (Appeals) could not stand.

Conclusion: The refund was admissible and the rejection order was unsustainable; the assessee succeeded.

Ratio Decidendi: Clearances treated by statute as export clearances, including supplies to SEZ units, continue to qualify for refund of accumulated Cenvat credit under Rule 5 where the governing statutory framework and binding circulars preserve that entitlement.

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