Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Halcyon Air Products Pvt. Ltd on 19 May, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/20315/2015-SM [Arising out of Order-in-Appeal No. 710-711/2014 dated 20/11/2014 passed by Commissioner of Central Excise, BANGALORE-I (Appeal).] Commissioner of Central Excise, Customs and Service Tax Bangalore-I POST BOX NO 5400, CR BUILDINGS, BANGALORE 560 001. Appellant(s) Versus M/s. Halcyon Air Products Pvt. Ltd 35-36, Ground And First Floor, Krishna Reddy Colony, Domlur Layout BANGALORE - 71 Karnataka Respondent(s)
Appearance:
Mrs. Kavitha, AR For the appellant Mr. Viswanath Bhatt, Con.
For the respondent Date of Hearing: 19/05/2017 Date of Decision: 19/05/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20703 / 2017 Per : S.S GARG The present appeal is filed by Revenue directed against the impugned order dated 20.11.2014 passed by the Commissioner (A) wherein the Commissioner (A) has allowed the appeal of the assessee.
2. Briefly the facts of the case are that the assessee is a manufacturer of pre-insulated ducting system falling under Chapter Heading 8415 9000 of Schedule to Central Excise Tariff Act, 1985 and are also availing the facility of CENVAT Credit on inputs, input services. The appellants have filed two refund claims of Rs.7,48,164/- and Rs.4,14,005/- for the period from July 2012 to September 2012 and October 2012 to December 2012 both dated 2.7.2013 under Rule 5 of CENVAT Credit Rules (CCR), 2004. Subsequently, two show cause notices both dated 13.9.2013 were issued proposing rejection of refund on the grounds that, certain period of claim is time barred, proof of debit in CENVAT account not produced, the goods cleared to EOU/SEZ cannot be considered as physical export etc. The original authority vide impugned orders rejected both the claim of refund and observed that, certain period is time barred, relevant documents were not submitted for Rs.91,36,725/- shown as export value and the goods cleared to EOU/SEZ cannot be considered as physical export. Aggrieved by the Order-in-Original, assessee filed appeal before the Commissioner (A) on the basis of the Circular No.29/2006-Cus. dated 27.12.2006 issued by the Department wherein it is provided that the supplies from DTA to SEZ unit or to SEZ Developers for their authorized operations inside the SEZ notified under subsection (1) of Section 4 of the Act may be treated as in the nature of exports. The Commissioner (A) after replying upon the decision of the Tribunal held that supplies from DTA to SEZ unit is a deemed export and as good as physical exports. Aggrieved by the said order, Revenue filed the present appeal.
3. Heard both the parties and perused the records.
4. Learned AR submitted that the impugned order is not sustainable in law. She further submitted that the decision relied upon by the Commissioner (A) while giving relief to the assessee is not applicable in the facts and circumstances of the case. She further submitted that exports and deemed exports are separate terms.
5. On the other hand the learned counsel for the respondent defended the impugned order and submitted that the Commissioner (A) while allowing the appeal of the assessee has relied upon the decision of the Tribunal which has been affirmed by the Supreme Court and therefore this issue is no more res integra and has been settled in favour of the assessee.
6. After considering the submissions of both the parties and perusal of the material on record, I find that the Commissioner (A) has allowed the appeal of the assessee by relying on the judgment of the Honble Supreme Court in the case of Virlon Textile Ltd. vs. CCE reported in 2007 (211) ELT 353 (SC) wherein it has been held that refund could not be denied on the ground that it was deemed export. Here it is pertinent to reproduce the relevant findings of the Commissioner (A) recorded in para 6 which is reproduced herein below:
6. Further, the impugned order distinguishing the physical export and deemed export thereby denying refund for the clearances made by the appellants to SEZ is unacceptable since Rule 5 of Cenvat Credit Rules 2004 does not make a distinction of export as deemed export and physical export. The issue of deemed exports has been considered in various judgments including a judgment of Honble High Court of Madras in which distinction is made out between physical exports. However, this judgment was considered by Honble High Court of Gujarat in the matter of NBM Industries: 2012 (276) ELT 9 (Guj.), which relying on the judgment of Honble Supreme Court in the case of Virlon Textile Mills Ltd. vs. CCE, Mumbai reported in 2007 (211) ELT 353 (SC) has held that refund could not be denied on the ground that it was deemed export. The jurisdictional Tribunal at Bangalore vide Final Order No.20067-20068/2014 dated 22.1.2014 in the case of M/s. Solidius Hi-Tech Products (P) Ltd. has held that deemed exports are to be treated on par with physical exports for granting refunds under Rule 5 of CCR, 2004. I am therefore bound by judicial discipline and hold that the clearances made on deemed exports basis by the appellants are to be included in the value while applying the formula to determine the eligible refund amount and the appellants are entitled for refund of amount so calculated. However, the lower authority is required verify once again the aspects of quantum of exports made, debit in CENVAT account of the amount claimed as refund and sanction the refund on merits. In view of my discussions above, I find no infirmity in the order passed by the Commissioner (A) and therefore, I uphold the impugned order by dismissing the appeal of the Revenue.
(Operative portion of the Order was pronounced in Open Court on 19/05/2017.) S.S GARG JUDICIAL MEMBER rv