Deemed exports would be treated as physical exports for the purpose of claiming refund under the Cenvat Credit Rules, 2004

Commissioner of Central Excise and Customs Vs. Anita Synthetics Private Limited [2014 (9) TMI 368 – Gujarat High Court]

Anita Synthetics Private Limited  (The Respondent) is a 100% EOU and made clearance of goods to another 100% EOU. Such clearance is treated as a deemed export as mentioned in the EXIM Policy. Therefore, the Respondent claimed the refund of Cenvat credit as per Rule 5 of the Cenvat Credit Rules, 2004 (the Credit Rules). The concerned Authority rejected the refund application.

The Commissioner (Appeals) and the  ͘ Hon’ble CESTAT of Ahmadabad allowed the  refund claims of the Respondent.

Being aggrieved the Department filed an appeal before the Hon’ble Gujarat High Court.

The Hon’ble High Court held that the facts and circumstances and the issues involved in the present case are squarely covered by the facts and circumstances and the issues involved in the case of Shilpa Copper Wire Industries [2011 (269) E.L.T. 17 (Guj.)].

The Apex court in the case of Shilpa Copper Wire Industries (supra) had held that clearance made by one 100% EOU to another 100% EOU, which are deemed exports are to be treated as physical exports for the purpose of claiming refund of unutilized Cenvat credit under Rule 5 of the Credit Rules.

Accordingly the Hon’ble court dismissed the  appeal of the Department.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)