EVEREST INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal is filed by M/s. Everest Industries Ltd. (hereinafter referred to as appellant) against order -in -appeal No. 105 -CE/MRT -1/2012, dated 25 -4 -2012. Brief facts of the case are that appellant had filed a refund claim of Cenvat credit of Rs. 12,87,520/ - on 5 -5 -2010 under Rule 5 of the Cenvat Credit Rules, 2004 in respect of unutilized Cenvat credit of duty/service tax paid on input/input service used in export of final product during period 1 -10 -2009 to 31 -3 -2010. Under Rule 6(1) of the Cenvat Credit Rule, 2004, Cenvat credit is not admissible on such quantity of input/input service which is used in the manufacture of exempted goods or services except in the circumstances mentioned in sub -rule(2). Since final products manufactured by the appellant are fully exempt under notification 50/2003 -C.E., dated 10 -6 -2003 appellant is neither eligible to avail the Cenvat credit nor can claim any refund of said credit under Rule 5 of the Cenvat Credit Rules. Accordingly a Show Cause Notice was issued to the appellant proposing the rejection of refund claim. Said Show Cause Notice was adjudicated by the Deputy Commissioner vide order -in -original No. R -8/2011, dated 14 -1 -2011. Appellant preferred an appeal before Commissioner (Appeals) who vide impugned order rejected their appeal. Hence this appeal.

(2.) LD . Counsel appearing for the appellant submits that in this case goods have been supplied to SEZ without payment of duty. Under Rule 6(6)(i) of the Cenvat Credit Rules once goods are supplied to SEZ, provision of sub -rule (1), (2), (3), (4) of Rule 6 become inapplicable. Since supplies to SEZ are export, the appellant is entitled to refund of Cenvat credit in report of duty/service tax. She further submits that even if it is assumed that final products are exempted under Notification 50/2003, refund of Cenvat credit can be availed by them under Rule 18 of the Central Excise Rule.

(3.) AFTER hearing both sides, we find that issue involved in this appeal is eligibility of refund claimed by the appellant under Rule 5 of the Cenvat Credit Rules in respect of inputs/input services used in final products supplied to SEZ, Rule 5 of the Cenvat Credit Rules reads as under: