K.S. Jhaveri, J. - (1.) By way of this appeal, the department has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the Department. Counsel for the appellant has framed the following substantial question of law :- "(i) Whether the Ld. CESTAT was correct in allowing the refund of Cenvat credit of Central Excise duty paid in respect of raw material procured from DTA Units under Rule 5 of the CENVAT Credit Rules, 2004 to the assessee and thereby misinterpreting the said provision?"
(2.) Counsel for the appellant has relied upon the decision of Karnataka High Court in case of Commissioner of Customs, Bangalore v. ANZ International reported in 2009 (233) E.L.T. 40 (Kar.) which has been confirmed by the Supreme Court wherein it has been held as under :- "4. After hearing both the sides and on perusal of record, it appears that the identical issue has come up before the Tribunal in the case of ANZ International v. CC, Bangalore -2008 (224) E.L.T. 573 (Tri.-Bang.) which was assailed before the High Court and finally, before the Hon'ble Supreme Court where it was upheld (Commissioner v. ANZ International - 2009 (240) E.L.T. A16 (S.C.) by observing that 100% Export Oriented Unit is entitled to take Cenvat credit of duty on inputs procured indigenously and when they were not in a position to utilise the same, they are entitled for benefit of refund under Rule 5 of Cenvat Credit Rules, 2004. The respondent-assessee procured casting articles from M/s. Continental Engines Limited to its sister concern on payment of Central Excise Duty. The respondent-assessee was engaged in exporting its final products without payment of duty under bond in terms of the provisions of Rule 19 of the Central Excise Rules, 2002. Since the proportion of domestic clearances of the respondent-assessee was miniscule during the relevant period, the respondent-assessee could not utilise the Cenvat credit availed by them and hence, filed refund claims in respect of such utilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004, but the same was denied by the Commissioner. However, the Commissioner in appeal vide order dated 16-9-2016 allowed the appeal filed by the respondent to allow the refund under Rule 5 of the Cenvat Credit Rules. Being aggrieved, department has filed the present appeal."
(3.) Counsel for the appellant has taken us to findings of the AO which reads as under :- "19. I find that reliance of DGFT Circular No. 16(RE- 2012/2009-17, dated 15-32013) placed in SCN is in reference of availment of exemption of Central Excise duty i.e. Terminal Excise Duty, DGFT has denied the refund of above duty for the reason that supply of goods to EOU by DTA unit are ab initio exempted from payment of excise duties and in cases, where exemption is mandated, the relevant taxes should not have been collected to begin with, this circular of DGFT also support the view taken by the department in the Show Cause Notice that instead of payment of duty of Central Excise on supplies of the goods to EOU and obtaining the refund of Terminal Excise Duty, the DTA unit should have to avail the exemption, which is available ab initio, this circular squarely support the departmental view. 20. Thus I find that the assessee do not require to pay the Central Excise duty on the goods procured from DTA and accordingly not entitled to avail Cenvat credit in respect of duty paid on input/capital goods on which exemption is already available and Notification No. 22/2003-CE., dated 31-3-2003 is an absolute notification as it exempts from whole of duty, uniformly to all EOUs, further, meaning of word "absolute" and its synonyms are complete, entire etc. The contention of the assessee that notification 22/2003-C.E., dated 31-3-2003 is conditional and not absolute as certain conditions are prescribed in the said notification is not tenable, I find that some procedures for availing the said notifications are prescribed and these are not said to be conditions, as the notification exempt all goods from whole of duty and exemption from duty of Central ExciseCustoms is the basic motto of the EOU scheme, case laws cited by the assessee in para 3.3 of reply are not relevant in the instant case. I further find that it is the settled law that the provisions of Section i.e. Act prevails over the Circulars and thus, provisions of Section 5A(1A) of Central Excise Act, 1944 applicable in this case and prevails over Circular No. 799/32/2004-CX., dated 23-9-2004. ;