Ashok Jindal, Member (J)

1. The appellants are in appeal against the order of denial of rebate claim under Rule 5 of Cenvat Credit Rules, 2004.

2. The facts of the case are that the appellants are engaged in the manufacture of metal containers. These metal containers supplied to various buyers, who (a 100% EOU) mainly used for packing "fruit pulp" which was exported by the buyers. Metal containers were cleared by the appellant without payment of duty to the 100% EOU under CT-3 certificate and DTA units under cover of Annexure I in terms of Notification 34/2001-C.E., dated 21-6-01. The said goods cleared by them to the 100% EOU were used as packing material and were exported by them. Thereafter, the appellants filed refund claim of the unutilised CENVAT credit lying accumulated in the CENVAT credit account.

3. On scrutiny of refund claim, it was found that the appellants has filed refund claim pertaining to unutilised credit lying accumulated as on 31-3-2008. The appellants submitted that their clearances are to 100% EOU is deemed exports and due to supply to this 100% EOU their duty paid clearances has gone down. Therefore the CENVAT credit has been accumulated in their CENVAT account and they are not able to utilise the same. The only reason of the accumulation of the CENVAT credit is to their clearances to 100% EOU. The allegation of the department is that the clearances 100% EOU cannot be treated as export under bond and or LUT. Hence the accumulation of the CENVAT credit is not as per Rule 5 of the CENVAT Credit Rules, 2004. Therefore, a show-cause notice was issued and the refund claim were denied on the following ground (a) the supplies to 100% EOU cannot be deemed export under bond and or LUT and (b) the claims of refund were submitted for three financial years at once instead of filing the refund claims on quarterly basis as per Notification 5/06 dated 14-3-2006. Aggrieved from the said order, the appellants are before us.

4. The ld. advocate for the appellants relied on certain case laws specifically in the case of Commissioner of Central Excise v. Shilpa Copper reported in : 2008 (226) E.L.T. 228 (T.-Ahd.) wherein on similar facts the refund claim was allowed of unutilised credit accumulated on account of clearance to 100% EOU as deemed exports. He further submitted that as per Notification 5/06-C.E. (N.T.), dated 14-3-2006 the claim of refund are to be submitted not more than once for any quarter in a calendar year. It does not mean that the assessee has to file the refund claim quarterly, therefore, this rejection of refund claim on this ground is not sustainable.

5. On the other hand, the Id. DR submitted that it is admitted fact that the clearance have been made by the appellants to 100% EOU as deemed exports. He further submitted that nowhere in the Central Excise Act or the Customs Act, the term "deemed export" has been defined. Moreover, clearance to SEZ by DTA units are also deemed export as per EXIM policy and in the case of CCE, Thane-I v. Tiger Steel - 2010 (259) E.L.T. 375 (T) this Tribunal has clearly held that clearances made to SEZ are not exports. Therefore in the facts of this case also, the clearance made to 100% EOU cannot be termed as export and impugned order is to be upheld.

6. Heard and considered.

7. After careful consideration of the submissions made by both we find that the rebate claim of the appellants were denied on two grounds : (a) the refund claims were not filed periodically (quarterly) and their clearances to 100% EOU is not an export in terms of Rule 5 of the Central Excise Rules, 2004.

8. To deal with the first issue, we have gone through the Notification 5/2006 dated 14-3-2006 wherein it is provided that the refund claim can be submitted not more than once in any quarter in a calendar year. From the perusal of the provisions, we find that the intent of the legislature was that the assessee should not file refund claim on day to day basis or weekly or invoice-wise. To avoid multiplicity of the refund claim this provision was made, therefore, it is suggested that refund claim can be filed on quarterly basis in a calendar year i.e. not more than four times in a calendar year. It does not mean that the assessee has to file refund claim quarterly. It is not the intent of the legislature. In our opinion, if the assessee files a refund claim once in a year that will also avoid the multiplicity. Therefore we do not find any merit in the denial of the rebate claim on this ground.

9. Now we will deal with the second issue wherein the refund claim has been denied on the ground that the clearance to 100% EOU does not qualify the provisions of Rule 5 of the CENVAT credit Rules, 2004 as these are not the exports. As contended by the DR, that in the case of Tiger Steel Engineering clearance made to SEZ were not held exports. The same treatment is to be given to this case. We are not in agreement with the argument of the DR. In fact in that case the issue before the Tribunal was whether the clearance made to SEZ are export or not. But in the case in hand, the facts are that the appellants have cleared the goods to 100% EOU which has further exported the goods physically. The intent of the legislature is to promote the exports of goods and not to export the taxes. In this case, the appellant has brought on record the evidences showing that the goods supplied by them to 100% EOU have finally been exported physically. Therefore, they are entitled to rebate claim. We have seen the impugned orders, both the lower authorities have not verified the documents whether the goods supplied by the appellants to 100% EOU have finally been exported physically or not. Therefore, matter needs examination at the end of the adjudicating authority. In view of the above observations, the matter is sent back to the adjudicating authority to verify from the evidences produced by the appellants whether the goods supplied by the appellants to 100% EOU were exported physically by EOU or not. It is made clear that if it is established that the goods supplied by the appellants have been physically exported by the 100% EOU, the adjudicating authority shall allow the refund claim of the appellants. With these observations, impugned order is set aside. Appeal is allowed by way of remand. It is pertinent to mention that the adjudicating authority shall decide the issue within 45 days of the receipt of this order after giving an opportunity to the appellants to present their case.