Rule 5 refund in case of Third party exports under CT-1

[B. Naga Rami Reddy]

Respected Sir/Madam,

We are manufacturers of bulk drugs and export goods through third party by following CT-1 certificate procedure under Rule 19 of Central Excise Rules,2002.We filed Refund claim under the provisions of Rule 5 of Cenvat Credit Rules,2004 with our Central Excise authorities. However, our claim is rejected saying that we are not the exporters as stipulated in the Rule 5 above as we did not export goods directly but sold goods to third party who finally exported.. The said claim was rejected even after our submission with the Authorities that CBEC Circular No.30/2005-customs dt 12.7.2005 has clarified that 'Third party exports' have been defined to mean exports made by an exporter or manufacturer on behalf of another exporter(s). The CBEC in the above Circular treats us as another exporter (Emphasis supplied). In spite of our claim that we fall under the category of another exporter, our submission ignored and claim rejected. We request the opinion on the matter from the learned experts as whether we are legally eligible for claim.

AI Summary

Manufacturer's Refund Claim Denied Despite Rule 5 and CBEC Circular; Third-Party Export Eligibility Disputed A manufacturer of bulk drugs sought a refund under Rule 5 of the CENVAT Credit Rules, 2004, for exports made through a third party using the CT-1 certificate procedure. The claim was rejected because the manufacturer was not the direct exporter. Despite citing CBEC Circular No. 30/2005, which defines third-party exports as valid, the claim was denied. An expert advised that the circular pertains to Foreign Trade Policy, not Central Excise, and suggested referring to Notification No. 04/2006 and case law, which supports refunds for third-party exports if the manufacturer's name is on the shipping bill. The manufacturer noted that Notification No. 18/2012 replaced the previous notification but still supports their eligibility.