[Chalapathy Rao Marthy]

Dear Sir, Whether a manufacturer can claim CENVAT refund, under notification no. 05/2006 dtd 14.03.2006 N.T., if the removal is towards 'deemend export' as deemed exports are excise free.

AI Summary

CENVAT Refund Not Applicable for Deemed Exports Under Notification No. 05/2006, Clarified by Rule 5 Cenvat Credit Rules 2004. A manufacturer inquired about the eligibility for a CENVAT refund under Notification No. 05/2006 for deemed exports, which are excise-free. An expert clarified that under Rule 5 of the Cenvat Credit Rules, 2004, refunds are applicable only for goods exported under a bond or letter of undertaking, not for deemed exports, which are treated as home consumption. Another expert concurred, noting that deemed exports result in accumulated CENVAT credit, which cannot be refunded, and suggested that paying duty and claiming a refund under the Foreign Trade Policy is not viable due to the availability of CENVAT to Export Oriented Units (EOUs).