Custom, Excise & Service Tax Tribunal
M/S Shree Shyam Pipes (P) Ltd vs C.C.E. & St Noida on 20 May, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. E/59152/2013 -Ex[SM]
[Arising out of Order-In-Appeal No. 67-CE/APPL/NOIDA/2013 dated: 22.03.2013 passed by CCE Raipur]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s Shree Shyam Pipes (P) Ltd. ...Appellant
Vs.
C.C.E. & ST Noida Respondent
Appearance:
Mr. D K Tyagi, Advocate for the Appellants Mr. M R Sharma, DR for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing.20.05.2015 FINAL ORDER NO. 53052 /2015 Per S. K. Mohanty (for the Bench):
The brief facts of this case are as follows:
1.1 The appellant is engaged in the manufacture of copper pipes and tubes. The appellant avails cenvat credit of Central Excise Duty paid on inputs and capital goods received in the factory for use in the manufacture of the final products. The above final products manufactured by the appellant are supplied to SEZ units, without payment of duty upon execution of requisite bond as provided under Notification no. 42/2001 C.E. (NT) dated 26.6.2001 issued by the Central Government. Since, supply of goods to the SEZ Units does not attract any Central Excise duty, the appellant was not in a position to utilize the accumulated cenvat credit available in its books. Therefore, during the disputed period, the appellant filed the application under Rule 5 of the Cenvat Credit Rules, 2004, claiming refund of unutilized cenvat credit. According to the appellant, since supply of goods to the SEZ Unit merits consideration as exports, the Central Excise duty refund is permissible under the said statutory provisions. The view point of the appellant was opposed by the Department on the ground that the requirement of Rule 5 of the said rules is only confined to physical export of goods and not to the goods supplied to SEZ unit. On such interpretation of the statutory provisions, the cenvat credit taken by the appellant has been denied by the authorities below.
2. The Ld. Advocate appearing for the appellant submits that supply of goods to SEZ units will be considered as physical export, and as such, refund claim for accumulated unutilized cenvat credit is permissible under Rule 5 of the Cenvat Credit Rules, 2004. To support his above stand, the Ld. Advocate relied on the judgment of Honble Chhattisgarh High Court delivered in the case of UOI vs Steel Authority of India Ltd. reported in 2013 (297) ELT 166 (Chhattisgarh) and also the Circular no. 6/2010-Cus dated 19.03.2010 issued by the CBEC. The Ld. Advocate further submits that the appellant had not claimed the rebate of input stage duty, and the cenvat benefit having been claimed by way of refund under Rule 5, the same cannot be denied to the appellant.
3. Per Contra, Ld. DR appearing for the Revenue reiterated the findings recorded in the impugned order and relied on the decision of the Tribunal in the case of CCE Thane-I vs Tiger Steel Engineering (I) Pvt Ltd reported in 2010 (259) ELT 375 (Tri. Mumbai) to substantiate his stand that supply of goods to SEZ unit will not be considered as physical export, and thus, rejection of refund claim in the impugned order is proper and justified. The Ld. DR further submits that the rebate in respect of export against ARE-1 No. SSPPL/15/2011-12 dated 07.09.2011 has already been sanctioned to the appellant, and as such, the appellant will not be eligible for refund of excise duty paid on the input goods.
4. Heard the Ld. Counsel for both the sides and perused the records.
5. The Government of India introduced a policy on 1.4.2000 for setting up of the Special Economic Zones (SEZ), with a view to provide an international competitive and hassle free environment for exports. As per the policy guidelines, no excise duty is leviable on the goods supplied to unit or developer under the SEZ and such supplies will be considered as exports. Keeping in mind the objective behind the SEZ policy, the SEZ Act was enacted in 2005. Section 2(m) in the said Act defines the term export, to mean supplying goods from the Domestic Tariff Area (DTA) to a unit or developer in SEZ. Section 51 of the said Act provides that it has overriding effects over any other law and in case of conflict the SEZ Act is to prevail.
6. Reading of the definition of export contained in Section 2(m) in the SEZ Act makes the position clear that even if there is no physical exportation of goods beyond the territorial waters of India, but supply of goods to the SEZ unit, shall be construed as export. In view of the definition of export in Section 2(m) and the overriding effect provided in Section 51 in the SEZ Act over other Acts and Rules, in my opinion, goods supplied to SEZ unit shall be considered as export for getting refund of accumulated cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004. In this context, the CBEC vide Circular No. 6/2012-Cus., dated 19.03.2010 has classified that rebate under Rule 18 is admissible when the supplies are made from DTA to SEZ. Further, I find support from the judgment of Honble Chhattisgarh High Court in the case of Steel Authorities of India Ltd. (Supra), wherein vide paragraph 37 it has been held that goods supplies from DTA to the Developer of SEZ are to be treated as export in view of Section 2(m) of SEZ Act, 2005, in which case, all benefits provided to export under any other law should be provided to the DTA unit supplying the gods to the SEZ unit.
7. The decision cited by the Ld. DR for Revenue in the Case of Tiger Steels Engineering (supra), will not have any binding effect, since the operation of order passed by the Tribunal has been stayed by the Honble Bombay High Court reported in 2011 (263) ELT A-104 (Bom.).
8. The refund claim under Rule 5 of the Cenvat credit Rules, 2004 is restricted and is not admissible in the eventuality, when the assessee claims rebate of input stage duty and also claims refund of un-utilized credit, as it will amount to refund of the same amount twice. However, in the case in hand, since the rebate claim has been sanctioned in respect of export of excisable goods, which is not in relation to rebate on input goods, in my considered view, denial of refund of input stage duty is not regally sustainable, in view of the fact that Rule 5 of the rules specifically provides for claiming refund of accumulated credit available in the books, which the assessee is not able to utilize, because of exportation of goods on which no central excise duty is leviable.
9. In view of above, the impugned order is set aside and the appeal is allowed in favour of the appellant.
(Dictated and pronounced in open court) (S.K. Mohanty) Member(Judicial) Neha Page | 1