By TIOL News Service

MUMBAI, JULY 15, 2016 : THE appellant cleared goods to SEZ and availed CENVATcredit in respect of input used therefor. On closure of the unit, Appellant claimed refund of the balance lying in the CENVATaccount in terms of Rule 5 of CCR, 2004.

The adjudicating authority sanctioned the refund holding that the claim is not time barred as it has been filed, in respect of balance of RG 23 Pt. II lying as on 13/5/2008, within time.It was also held that supplies made to SEZ have been treated as export as per the SEZ Act, 2005.

In the appeal filed by Revenue, Commissioner (Appeals) held that supplies made to SEZ is not exports and the refund is not admissible for the period prior to issue of amendment notification No. 50/08-CE (N.T.) dated 31/12/2008. He, however,did not give any findings on time bar.

The assessee is before theCESTAT and submits that it is a settled law that supplies made to SEZ haveto be treated at par with physical exports made out of India and all the benefits and incentives available to the physical export are mutatis mutandis applicable to the supplies made to the SEZ even before issue of notification no. 50/08-CE (N.T). It is also stated that refund was filed in respect of closing balance of their CENVAT account which has the credit accumulated and lying in balance as on 13/5/2008 i.e. date of surrendering of the registration of appellant's factory and, therefore, time of limitation should be reckoned from 13/5/2008, hence the refund is within the time.

The AR did not add anything apart from reiterating the findings of the impugned order.

The Bench observed that the issue whether supplies made to SEZ is exports or otherwise, even in case where supplies were made prior to issue of notification No. 50/08-CE (N.T.) dated 31/12/2008 has been settled in following judgments viz. B.J. Services Company Middle East Ltd. - 2010-TIOL-569-CESTAT-MUM, Tata Consulting Engineers Ltd. - 2013-TIOL-727-CESTAT-MUM and where it is held that supplies made to SEZ either prior to 2008 or thereafter has been considered as exports and consequently assessee is entitled for all the benefits and incentives which is otherwise available to physical export of goods out of India including refund under Rule 5 of CCR, 2004 or Rule 18 of CER, 2002.

In the matter of time bar, the Bench observed that the adjudicating authority had given a categorical finding that the refund is in respect of accumulated credit and, therefore, limitation of one year shall not apply. However, although this findingwas challenged by the Revenue before the Commissioner(A),he had not given any findings and since Revenue had not challenged the order further, the finding had attained finality and could not now be raised.

Holding that the appellant is entitled for refund, the impugned order was set aside and the appeal was allowed.

(See 2016-TIOL-1743-CESTAT-MUM)