Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Apotex Pharma Chem India Pvt. Ltd on 18 January, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/21610/2016-SM, E/21611/2016-SM, E/21612/2016-SM, E/21613/2016-SM, E/21614/2016-SM [Arising out of Order-in-Appeal No. 138-142/2016 dated 14/09/2016 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 Apotex Pharma Chem India Pvt. Ltd Plot No 1A Jigani Link Road 4th Phase Bommasandra Industrial Area Hosur Road BANGALORE - 560099 Karnataka Respondent(s)
Appearance:
Dr. Ezhilmathi, AR For the appellant Mr. S. Sivakumar, Advocate For the respondent Date of Hearing: 18/01/2017 Date of Decision: 18/01/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20097-20101 / 2017 Per : S.S GARG The department has filed these 5 appeals against the common impugned Order-in-Appeal No.138-142/2016-CE dated 14.9.2016 whereby the learned Commissioner (A) has allowed the refund of CENVT credit relating to deemed export.
2. Briefly the facts of the case are that the respondent-assessee is a 100% EOU issued with private bonded warehouse license and in-bond manufacturing sanction order for manufacture and export of fine organic compounds. The respondent-assessee has filed 5 refund claims. The details of which are given below relating to different period.
Appeal No. CENVAT Credit Period E/21610/2016 Rs.36,74,868/-
January March 2014 E/21611/2016 Rs.45,77,521/--
January March 2013 E/21612/2016 Rs.41,84,180/-
October December 2013 E/21613/2016 Rs.41,42,759/-
July September 2013 E/21614/2016 Rs.40,54,070/-
April June 2013 Thereafter a show-cause notice was issued proposing to deny the refund on the ground that deemed exports cannot be termed as physical export and Rule 5 of CENVAT Credit Rule (CCR), 2004 read with Notification No.27/2012 dated 18.6.2012 does not apply in the case of deemed export. After following the due process, the adjudicating authority has rejected the refund. Aggrieved by the said order, the respondent-assessee filed appeal before the Commissioner (A) who vide the impugned order has allowed the refund by relying upon the various judgments given by the Tribunal and the High Court holding that deemed export are as good as physical exports and the appellant is entitled to refund of CENVAT credit on account of deemed exports. Aggrieved by the said order, the Revenue has filed the present 5 appeals.
3. Heard both the parties and perused the records.
4. The learned AR submitted that the impugned order allowing the refund is not sustainable in law. She further submitted that Rule 5 of CCR, 2004 which governs the sanction of refund does not provide for refund of accumulated credit of inputs in case of deemed exports. Further the learned AR submitted that the decision of the CESTAT in the case of Shilpa Copper Wires Industries is not applicable in the present case. She further submitted that the provisions of Customs and Excise law are dependent upon the statutory definition of exports and it is clear that Rule 5 provisions related to refund of unutilized CENVAT credit are applicable to only physical exports and not to deemed exports. She also submitted that there is conscious policy decision of Government to treat the deemed exports as different from physical exports.
5. On the other hand, the learned counsel appearing for the respondent-assessee cited various decisions in support of his submission which have already been considered by the learned Commissioner (A) while allowing refund under Rule 5. He further submitted that this Honble Bench vide Final Order No.2113/2016 dated 9.11.2016 in the respondents own case has allowed refund with respect to deemed exports. Further, in support of his submission, he relied upon the following decisions:
i. CCE vs. Shilpa Copper Wire Industries: 2011 (269) ELT 17 (Guj.) ii. CCE vs. NBM Industries: 2013 (29) STR 208 iii. EI Dupont India Pvt. Ltd. vs. UOI: 2014 (305) ELT 282 iv. East India Commercial Co. Ltd. vs. Collector: 1983 (13) ELT 1342 (SC)
6. After considering the submissions of both the parties and perusal of the impugned order, I find that there is no infirmity in the impugned order and the learned Commissioner (A) while allowing the refund in respect of deemed exports has given elaborate reasons based upon various case laws cited supra. Here it is pertinent to reproduce the relevant paragraphs from the impugned order whereby the Commissioner (A) has given the reasoning for his findings.
8. It is seen that the appellant a 100% EOU had cleared the goods to another 100% EOU, Apotex Research on IUT basis (Inter Unit Transfer). With respect to this issue the assessee have argued that clearances on iur basis are at par with physical exports as the procedure followed for clearances of goods on IUT basis and for physical exports are identical. It is seen that the Original Authority has riot taken into account deemed export clearances while calculating the admissible amount of refund of unutilized credit under Rule 5 of Cenvat Credit Rules. The issue of deemed exports and physical exports has been considered by the Hon'ble High Court of' Gujarat in the case of NBM Industries- 2012 (276) ELT 9 (Guj) which relying on decision of the 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 credit. Jurisdictional Tribunal at Bangalore vide Final Order No.20067-20068/201.4 dated 022.01.2014 in the case of M/s. Solidius High Tech Products Pvt Ltd has held that deemed exports are to be treated on par with physical exports for granting refunds under Rule 5 of CCR 2004. It is further observed that Hon'ble Cestat, Tribunal in the appellant's own case Apotex Pharmachem (I) Pvt Ltd vs. CCE Bangalore vide Final Order No.21795-21797/2015 dated 07.07.2015 in Appeal Nos. E/348/2010, E/27848/13 & E/27849/13 have allowed their Appeals for refund of Cenvat credit for supplies to another 100% EOU. The Tribunal in the Order dated 07.07.2015 observed as follows:
"13. The findings recorded in the impugned order that physical export is not to be equated with deemed export, and thus, the appellant is not entitled for refund oj'Cenvat credit in terms of Rule S oj'the Rules, in my considered opinion, is s not legal and proper, in. of the judgment of Hon'ble Gujarat arat High Court in the case of Shilpa Copper (supra). In response to the question framed in paragraph I (a.), as to whether, the clearances made by one 100% EOU to another 100% EO(J which are deemed export are to be treated as physical export for the purpose entitling refund of unutilized Cenvat credit, the Hon'ble Court vie paragraph 16 have answered as follows:-
"16. In the above fact situation, we are of the view that n question of law much less any substantial question of law, arises ob of the order of the Tribunal and even if it arises, the answer is very obvious and we, therefore, hold that the Tribunal is justified and ha., not committed any substantial error of law in dismissing the appeal o, the Revenue and confirming the order of the learned Commissioner (Appeals) holding that the clearances made by one 100% EOU to another .100% EOU which are deemed exports are to be treated as physical exports for the purpose of entitling refund of unutilized Cenvat credit contemplated under the provisions of Rule 5 of the Cenvat Credit Rule, 2004. "
14. In view of the judgment of the Division Bench of Hon'ble Gujarat High Court in the case of Sh.11pa. Copper (supra), deciding the specific issue ssue arising out of Rule 5 of the rules, reliance place by the Id. D.R. for Revenue on the judgment of the Single Bench of Honble Madras High Court in the case of BAPL Industries (supra) will not have the binding precedence, because as per settled principles of law, in case of two conflicting orders; one of a single judge and one by a division bench, the order issued by the division bench would prevail.
15. In view of the above, the impugned order so far as to the rejection. of refund claim on the ground of being time barred under Section 11B of the Act is sustained (Rs.3,31,2741-). The rejection of refund claim on the ground that supply of goods between two EOUs, is not eligible for refund being a deemed exportis set aside (Rs.4,92,0361-).
16. The appeals are disposed of in above terms."
9. I also rely on Gujarat High Court decision in the case of EI Indtistrie 201.4(305) ELT 282 (Guj) wherein it was observed "Refund - Cenvat credit - Inputs used in manufacture of goods cleared. by DTA units to 100% Export Oriented Units - Refund not to be denied on ground that it is case of deemed export and not physical export - Rule 5 of Cenvat Credit Rules, 2004. [2012 (276) E.L.T. 9 (Guj.) relied on]. [para 6]"
10. In Amitcx Silk Mills Pt Ltd vs.CCE 2007(21.6) ELT 589 (T), Tribunal held that the deemed exports are to be treated at par with physical exports. This decision was upheld by Supreme Court in 2010 (259) ELT A98 (SC).
6.1 Further, in the respondents own case, this Tribunal has already taken a view that deemed export is equivalent to physical exports for the purpose of Rule 5.
7. In view of decisions cited supra, I am of the considered opinion that there is no infirmity in the impugned order and I uphold the impugned order by dismissing all the 5 appeals of the Revenue.
(Operative portion of the Order was pronounced in Open Court on 18/01/2017.) S.S GARG JUDICIAL MEMBER rv 7