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M/s Apotex Pharmachem India Pvt. Ltd., Bangalore Versus Commissioner of Central Excise, Bangalore Central Excise, Commissionerate, Bangalore

2015 (10) TMI 2353 - CESTAT BANGALORE

Refund claim - CENVAT Credit - denial of Cenvat credit refund on the ground that supply of goods from one 100% EOU to another 100% EOU will not be considered as 'physical export' - whether, the time limit prescribed in Section 11B of the Act would be applicable for refund of accumulated Cenvat credit in terms of Rule 5 of the Rules: and, supply of goods between two EOUs, which is recognized as 'deemed export' under the FTP, would be considered as 'physical export'. for the purpose of getting the .....

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ecified in Section 11B of the Central Excise Act, 1994 - The term 'relevant date' has neither been defined in Rule 5 of the Rules nor in the notification issued there under. Further, the said term defined in Section 11B of the Act is not compatible with the situation envisaged in the aforesaid rule. Therefore, there was ambiguity in interpreting the importance/significance of the term 'relevant date' in context with the said rule. The Hon'ble High Court of Madras in the case of GTN Engineering ( .....

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llant is not entitled for refund of Cenvat credit in terms of Rule 5 of Rules, in my considered opinion, is not legal and proper, in view of the judgment of Hon'ble Gujarat High Court in the case of Shilpa Copper (2010 (2) TMI 711 - GUJARAT HIGH COURT ). - 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. The rejection of refund claim on the ground that supply of goods between two EOUs, is not eligible for refu .....

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ed by the appellant against three Adjudication Orders being Nos. 22/R/ST/AC/2009, 23/R/ST/AC/2009 and 24/R/ST/AC/2009, all dated 11.02.2009 have been disposed of vide the said impugned order, wherein refund of Cenvat credit of ₹ 8,23,310/- has been denied to the appellant. The reason assigned for denial of the refund benefit, firstly is that the claim amount for ₹ 3,31,274/- is barred by limitation of time; secondly, with regard to the balance amount of ₹ 4,92,036/- the claim h .....

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/2009 Oct.-Dec 2007 - 22,494 22,494 24/2009 Jan-Mar 2008 - 4,40,373 4,40,373 TOTAL 331,274 4,92,036 8,23,310 2. Brief facts of the case are as under:- The appellant is a 100% EOU engaged in the manufacture of pharmaceutical products. During the dispute period, the appellant supplied certain quantities of these goods to another 100% EOU, namely M/s Apotex Research Pvt. Ltd. (located within India), under the procedure prescribed in the Foreign Trade Policy (FTP). As per the FTP, inter unit transfe .....

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e period from 01.07.2007 to 11.08.2007 was rejected by both the authorities below on the ground that the claim has been lodged beyond the period of one year, and as such, the same is barred by limitation of time as per Section 11B of the Central Excise Act, 1944 (for short, referred to as "the Act"). With regard to the other refund claims filed for the period October to December' 2007 and January to March' 2008, the same have been rejected on the ground that the provision of Ru .....

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2006-Central Excise (N.T.) dated 14.03.2006. In this context, while relying on paragraph (2) of the Appendix to the said notification, the ld. Advocate submitted that since the word 'may' is used therein, the appellant is entitled to file the refund claim on a quarterly basis. Ld. Advocate also relied on the Board Circular No. 112/6/2009-ST, dated 12.03.2009 to justify his above stand. Further, the ld. Advocate submitted that Section 11B of the Act is not applicable for refund claims fil .....

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f goods from one 100% EOU to another 100% EOU will not be considered as 'physical export', the submissions of Shri Shivkumar, the ld. Advocate are that deemed exports are to be treated at par with physical exports for the purpose of refund of unutilized Cenvat Credit under Rule 5 of the Rules. For defending his case in this front, the ld. Advocate relied on the judgement of Gujarat High Court in the case of Commissioner of Central Excise-Vs.-Shilpa Copper Wire Industries, reported in 201 .....

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he refund claim shall be confirmed to one year form the date on which the goods are cleared for 'deemed export'. the ld. D.R. relied on the judgement of Hon'ble Madras High Court, delivered in the case of Commissioner of Central Excise, Coimbatore-Vs.- GTN Engineering (I) Ltd. , reported in 2012(281)ELT 185(Mad.) to justify his above stand. The ld. D.R. further submitted that physical export is not to be equated with deemed export, and therefore, the appellant is not entitled for ref .....

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Cenvat credit in terms of Rule 5 of the Rules: and, supply of goods between two EOUs, which is recognized as 'deemed export' under the FTP, would be considered as 'physical export'. for the purpose of getting the benefit of refund under Rule 5 of the said rules. 7. The provisions governing refund of Cenvat credit of service tax paid on the input services, used for exportation of the manufactured goods are contained in Rule 5 of the Rules. The said rule provides that even though e .....

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be specified, by the Central Government, by issuance of notification. 8. In exercise of the powers conferred by Rule 5 of the Rules, the Central Government vide Notification No. 5/2006-C.E.(N.T.) dated 14.3.2006 prescribed the conditions/limitations for claiming refund of service tax by a manufacturer. In Appendix No. 6 of the said notification, it has been provided that refund application in Form A is to be filed with the jurisdictional Central Excise authorities before the expiry of period sp .....

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in the case of GTN Engineering (supra), upon analysis of the provisions of Rule 5 of the Rules, Notification dated 14.03.2006 and Section 11B of the Act, have held that the date on which the export of the goods was made and for such goods, refund of Cenvat credit is claimed, should be construed as the relevant date for the purpose of Rule 5 of the Cenvat Credit Rules. The relevant paragraph in the said judgement is extracted below:- "15. A reading of the above rule, though there is no spec .....

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the goods was made and for such goods, refund of Cenvat credit is claimed" 10. On a conjoint reading of Appendix 2 and 7 in the notification dated 14.03.2006, it reveals that there is no contradiction among the said provisions. In the former provisions, the restriction contained is to the effect that refund cannot be claimed more than once for any quarter in a calendar year by a manufacturer other than the EOU; that for EOUs, the option has been provided for submission of refund claim for .....

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he present case, in as much as, the issue in the said decided case is not in context with the time limit prescribed in notification dated 14.03.2006, providing the embargo for filling the refund claim within one year from the relevant date. Contrary is the situation in the case in hand, where the issue is entirely confined to the applicability of the time limit prescribed in the said notification read with the provisions of Section 11B of the Act, for claiming refund of unutilized Cenvat credit .....

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istinguished by the Hon'ble Madras High Court in the case of GTN Engineering (supra). The relevant paragraph in the said judgment is extracted below:- "16. The learned counsel for the respondent would rely upon a judgment of the Gujarat High Court reported in 2008 (232) E.L.T 413 (Guj.)[Commissioner of Central Excise and Customs, Surat-I v. Swagat Synthetics]. That was a case relating to sub-rule (13) of Rule 57F of Central Excise Rules, 1944. which reads as under:" "(13) Wher .....

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nd of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification in the Official Gazette." The said rule does not prescribe any time-limit. In the absence of such prescribed as to the limitation, the Gujarat High Court has held that the claim of refund could not be rejected on the ground of limitation." 13. The finding recorded in the impugned order that physical export is not to be equated with deemed export and thu .....

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