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Old practice of Government-High Court Decision undone

Cenvat Credit - By: - Pradeep Jain - Dated:- 7-3-2015 - An article by: CA Pradeep Jain, CA Neetu Sukhwani and Bharat Rathore Introduction:- It is a very old tactic followed by the government that when the interpretation taken by High Court or Supreme Court on an issue is consistently held against the revenue, the best solution lies with amending the statutory provision or adding explanations to it. This is the strategy that the Modi s government has adopted in this Budget also. All the propagand .....

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to the refund of accumulated cenvat credit available to the exporters. The Rule (1) states that:- RULE 5 Refund of CENVAT Credit. - (1) A manufacturer who clears a final product or a intermediate product for export without payment of duty under bond or letter of Undertaking , or a service provider who provides an output service which is exported without payment of service tax, shall be allowed refund of CENVAT credit as determined by the following formula subject to procedure, safe guards, cond .....

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under Rule 5 or the refund is to be granted only for the physical exports made without payment of duty under bond or letter of undertaking . It was contended by the assessees that clearance to 100% EOUs are effected against CT-3 that is issued by debiting the requisite amount from the bond executed by 100% EOUs and consequently, such clearances are also to be considered at par with export under bond. Moreover, the Hon ble Gujarat High Court has held in the case of Commr of C.Ex. Vs Shilpa Copper .....

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physical exports only and not admissible for deemed exports. In this case, the decision was delivered by placing reliance on another Apex Court decision given in the case of Virlon Textile Mills Ltd. Vs Commr of C.Ex., Mumbai [2007 (4) TMI 6 - SUPREME COURT OF INDIA]. It is also worth observing that recently, the same Gujarat High Court in the case of E I Dupont India Pvt. Ltd. Vs Union of India [2014 (5) TMI 128 - GUJARAT HIGH COURT] has confirmed the fact that even deemed exports are eligible .....

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. This instruction also clearly states that if there exists any precedent judgement which has been decided against the revenue then the officers shall be bound by it. Moreover, even if the appeal has been filed against the precedent judgment by the revenue department, still the same is required to be followed for deciding the issue in case of other assessees in view of the decision given by the Supreme Court in the case of Kamalakshi Corporation Ltd. Inspite of the above cited decisions pronounc .....

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