2016 (8) TMI 939

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....he finished products. The dispute is regarding the claim of refund filed under Rule 5 of the Cenvat Credit Rules. This refund claim was filed on the ground that they are not in a position to utilize the cenvat credit of duty paid on the inputs used in the manufacture of final products, which were cleared to a 100% EOU under CT-3 certificates. The claim was disallowed by the Original Authority vide his order dated 28.02.2008 on the ground that the clearances to 100% EOU is in the nature of deemed exports. The refund of cenvat credit under Rule 5 can be given only where there is actual export. The rejection of the refund claim was upheld by first Appellate Authority vide his impugned order and hence, the present appeal before this Tribunal. ....

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....LT 280(T-Delhi) 5. He further submitted that since the issue is no longer res integra, their appeal deserves to be allowed. 6. Ld. DR, on the other hand, submitted that the goods cleared by a DTA unit to 100% EOU against CT-3 were removed from  the factory under cover of ARE-3. Thus, the goods were not taken out of India. The agency to give relief of terminal excise duty for deemed export is DGFT and not CBEC. He further contended that the word used in Rule 5 was export , which is defined in the Customs Act, 1962 under Section 2(18) as, taking out of India to a place outside India . Accordingly, he prayed that the appeal deserves to be dismissed. 7. We have heard both the sides and given due consideration to the submissions as....

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.... Section 3 of the Customs Tariff Act shall be utilized for payment of service tax on any output service. Explanation : For the purposes of this rule, the words output service which is exported means the output service exported in accordance with the Export of Service Rules, 2005.]" This rule provides for refund of cenvat credit taken on inputs or input service when the same is used in the manufacture of final product, which is cleared for export. The rule also provides for refund, when such final product is used in the intermediate product or used for providing output service, which is exported. The dispute in the present case is whether the clearances to 100% EOU (which is a deemed export) may be considered on par with export, ....

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....ents in the cases of Western Cans P. Ltd. reported in 2011 (270) E.L.T. 101 (Tribunal-Mumbai) and NBM Industries v. C.C.E. reported in 2009 (246) E.L.T. 252 (Tribunal-Ahmd.). In all these judgments, it has been held that when the finished goods manufactured out of cenvat credit availed inputs have been supplied to 100% EOUs, refund of accumulated cenvat credit under Rule 5 cannot be denied on the ground that the supplies to 100% EOU are deemed export and not real exports, as Rule 5 of the Cenvat Credit Rules also provides for the refund of cenvat credit on the goods which are cleared as intermediate products for manufacture of final products for export and supplies to 100% EOU have to be treated as clearances for export. Hon'ble Gujarat Hig....