Excise duty to sez units

We are manufacturer of aumtomobile components. We have a unit in SEZ also. Suppliers who are supplying to our SEZ unit, are not charging Excise Duty in thier invoices as we are issuing ARE1. But one of our suppliers is a dealer. He imports goods by paying Cust Duty & CVD and is stocking for domestic needs. Till date we were buying materials  from him for our units other than SEZ unit. Now we have placed order with him for a huge quantity for our SEZ unit. He says that since he has already paid CVD he has no other go but to charge Excise Duty. Please clarify whether he is correct? If he is correct, can we get it refunded from Department?