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of <h1>CESTAT Upholds Refund of CENVAT Credit on DTA to SEZ Clearances as Exports Under Rule 5</h1> <h3>Commissioner of Central Excise – Thane-I Versus Tiger Steel Engineering India Pvt. Ltd.</h3> The CESTAT Mumbai upheld the refund of accumulated CENVAT credit on inputs used for manufacturing excisable goods cleared from Domestic Tariff Area (DTA) ... Refund of accumulated CENVAT credit taken in respect of the inputs used for the manufacture of finished excisable goods “pre-fabricated steel building structures” and cleared to Special Economic Zone (SEZ) - applicability of benefit of circular dated 28.04.2015 issued by the CBEC - HELD THAT:- It is found that the issue of ‘refund of accumulated CENVAT credit when the goods are cleared from DTA to SEZ’, have been clarified by the CBEC and in the judgements of the higher judicial forum. On plain reading of the Circular dated 28.04.2015 issued by the Ministry of Finance, CBEC, it transpires that clearances of excisable goods made from DTA to SEZ shall be treated as ‘export’ and the resultant CENVAT Credit in the books of accounts of the assessee, when claimed as refund of accumulated CENVAT credit shall be allowed in terms of Rule 5 CANVAT Credit Rules, 2004. The issue has also been examined by the Hon’ble High Court of Gujarat in the case of Essar Steel Limited [2009 (11) TMI 141 - GUJARAT HIGH COURT] by holding that movement of goods from Domestic Tariff Area to Special Economic Zone units or developers shall be considered as export. The impugned order dated 11.02.2009, in setting aside the orders of the original authority in rejection of refund claims filed by the respondent-assessee, is legally sustainable and does not require any interference - the appeals filed by Revenue does not have any grounds for entertaining the same. Appeal of Revenue dismissed. ISSUES: Whether supplies of excisable goods from Domestic Tariff Area (DTA) to Special Economic Zone (SEZ) units qualify as 'export' under Rule 5 of the CENVAT Credit Rules, 2004 and Rule 18 of the Central Excise Rules, 2002.Whether the claimant is eligible for refund of accumulated CENVAT credit on inputs used in manufacture of goods cleared to SEZ units.Whether the impugned order allowing refund of accumulated CENVAT credit by setting aside the original authority's rejection orders is sustainable in law. RULINGS / HOLDINGS: The Tribunal held that clearances of excisable goods from DTA to SEZ shall be treated as 'export' within the meaning of Rule 5 of the CENVAT Credit Rules, 2004 and Rule 18 of the Central Excise Rules, 2002, based on the CBEC Circular No. 1001/8/2015-CX.8 dated 28.04.2015 and judicial precedents.The refund of accumulated CENVAT credit on inputs used for manufacture of excisable goods cleared to SEZ units is allowable since such clearances constitute export and satisfy the conditions of Rule 5 of the CENVAT Credit Rules, 2004.The impugned order passed by the Commissioner (Appeals) allowing the refund claim and setting aside the original authority's rejection orders is legally sustainable and does not warrant interference. RATIONALE: The legal framework applied includes Rule 5 of the CENVAT Credit Rules, 2004, Rule 18 of the Central Excise Rules, 2002, and provisions of the SEZ Act, 2005, particularly Sections 2(m)(ii), 26(1)(d), 51(1), and 53(1), which collectively establish that supplies from DTA to SEZ units constitute export and SEZ is deemed outside customs territory.The CBEC Circular No. 1001/8/2015-CX.8 clarifies that post amendments, benefits of rebate of duty and refund of accumulated CENVAT credit on goods cleared from DTA to SEZ continue to be available, reinforcing that such clearances are exports.Judicial precedents from the Hon'ble High Courts of Gujarat and Madhya Pradesh affirm that (i) movement of goods from DTA to SEZ units is export, and (ii) departmental circulars issued by the Board under Section 37B of the Central Excise Act, 1944 are binding on officers unless contrary to Supreme Court or High Court rulings.The Tribunal's earlier order rejecting the refund claims was set aside by the High Court, which remanded the matter for fresh consideration in light of applicable legal provisions and clarifications.No dissent or doctrinal shift was noted; the decision aligns with established statutory interpretation and administrative instructions.
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