By TIOL News Service

NEW DELHI, OCT 06, 2017: THE appellant is engaged in the manufacture of excisable goods falling under Ch. 72 and claimed refund of unutilised Cenvat credit amounting to Rs.4,19,249/- in terms of Rule 5 of the CCR, 2004.

Such Cenvat credit was availed on inputs and capital goods used in the manufacture of finished products supplied to projects financed by Asian Development Bank (ADB) under notification No. 108/95 CE dated 28.8.1995.

Both the lower authorities rejected the refund claim and hence an appeal before the CESTAT.

The appellant argued that the supplies made to a project financed by ADB are to be deemed as export and consequently, refund of Cenvat Credit u/r 5 is allowable as held by Gujarat High Court in the case of  E I Depont India Pvt. Ltd. =  2013-TIOL-1172-HC-AHM-CX.  Reliance is also placed on the decisions in NBM Industries =  2011-TIOL-677-HC-AHM-CX and Shilpa Copper Wire Industries =  2008-TIOL-2789-CESTAT-AHM .

The AR submitted that the case laws cited are distinguishable; that supplies made to ADB projects cannot be considered as export or deemed export and consequently, refund is not be payable to the appellant.

The Bench reproduced rule 5 of the CCR, 2004 and observed -

"7. In the present case, the goods have been supplied by the appellant to a project financed by ADB. It is nobody's case that such supplies are to be considered as exports. However, the claim of the appellant is that such transaction be considered as 'deemed export' in terms of para 8.3 of EXIM Policy 2012-2013.

8. We have gone through the provisions of para 8.3 (supra) but note that goods cleared to a project financed by ADB, enjoying exemption in terms of notification No. 108/95-CE dated 28.8.1995, are not specified under the category of 'deemed exports'. Further, the authorities below in the impugned order, recorded that payment for such supply was not being received in foreign currency and no bill of export have also been prepared for the sale of such goods in India. Consequently, the supply to ADB project does not fall in the category of export / deemed export and hence, we are of the view that appellant will not be eligible for refund of Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004 ."

Noting that all the cases cited by the appellant dealt with the benefit of refund under Rule 5 in respect of clearance made by domestic unit to 100% EOU and, therefore, cannot be made applicable to the case on hand, the impugned order was upheld and the appeal was rejected.

(See 2017-TIOL-3599-CESTAT-DEL)