AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 279
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....e the orders of the lower authority that rejected four claims of refund sought under rule 5 of CENVAT Credit Rules, 2004. M/s Arrow Engineers, as supplier of goods to entities in Special Economic Zones, applied for encashment of balance in CENVAT credit account attributable to supply of goods to units in Special Economic Zone deemed to be exports under the special statute governing such zones. The four claims for Rs. 2,21,339, Rs. 7,84,244, Rs. 17,68,983 and Rs. 25,33,623 pertained to September 2011, October-December 2011, January-March 2012 and April-June 2012 respectively. 2. The primary argument of the respondent in the impugned proceedings viz., the impropriety of disregarding the stay of operation of the decision of the Tribuna....
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....el Engineering (I) Pvt Ltd to support this contention and the circulars of the Central Board of Excise & Customs to demonstrate that the scope of these did not extend to refund of taxes/duties incurred on procurement of input services/inputs. This decision of the Tribunal cited by Learned Authorized Representative would not stand them in good stead owing to the stay of operation of the said decision. Neither would the stay operate in favour of the respondent as its intent is restricted to temporary protection of the refund sanctioned to the assessee. 4. However, the decision of the Tribunal in Commissioner of Central Excise, Pune II v. Quality Screens [2008 (226) ELT 608 (Tri.-Mumbai)] and in Commissioner of Central Excise & Service Tax,....
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.... claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax. xxxxx 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 Services Rules, 2005." to a closer examination. 5. As can be seen from a careful perusal of the provisions, rule 5 is not, notwithstanding the title, merely a refund enabler. It accords sanctity to availing of CENVAT credit in transactions of goods or services that are, otherwise exempt and, in consequence, not entitled to the privileges of the scheme. This is in recognition of t....
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....ly, input services/inputs used in manufacture/provision of exempt (including export) goods/service are excluded for consideration for the pool of credit under the CENVAT scheme, the compelling necessity to leach the duty from export goods/services warrants the enablement of such privilege. It may, therefore, be posited that rule 5 is the exception to rule 3 and the strict injunction in rules 6 barring the acknowledgement of exempt goods/services is waived in the circumstances enumerated in subsection (5) of rule 6. 7. Applying this stencil to supplies effected to units in special economic zones, it is apparent from rule 6(5) that such supplies are not exports per se but are accorded a treatment akin to that of exports in the availing of ....
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....l Excise, Raipur [2012 (282) ELT 108 (Tri.-Del.)] also relies upon the circular of the Central Board of Excise and Customs. The circular has been issued to allay the apprehensions of the trade that amendments to rule 5 of CENVAT Credit Rules, 2004 and rule 18 of Central Excise Rules, 2002 may alter any privilege of goods cleared to Special Economic Zone to the extent that such goods are in conformity with the definition of exports in the Central Excise Act, 1944 and the rules framed therein. The benefit of rule 18 of Central Excise Rules, 2002 and rule 5 of CENVAT Credit Rules, 2004 are available. However, in the present instance, the impugned order has failed to demonstrate as such. 10. From the above, it is apparent that supplies to sp....