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2019 (4) TMI 339 - CESTAT MUMBAIDuty Drawback - legality of withholding of additional duties of customs, amounting to ₹ 47,07,366/-, that had been discharged at the time of import - Held that:- Doubtlessly, the importer is entitled to avail CENVAT credit of additional duties under CENVAT Credit Rules, 2004 which, in this context was available in two tranches prescribed for capital goods. It is also not in dispute that CENVAT credit so availed had been reversed. It would appear that the provisions of CENVAT Credit Rules, 2004, pertinent to officers of central excise and service tax, has been drawn upon by officers of customs, without authority to do so, for denying claim of drawback. CENVAT credit is a facility that enables the discharge of duty of excise on excisable goods out of common pool and the availment of such credit is, by no stretch of law or procedure or imagination, a discharge of excise duty liability; in fact, the availment arises from, in this instance, from the discharge of additional duties of customs. Under section 74 of Customs Act, 1962, the eligibility is to the extent of 98% of ‘any duty has been paid on importation’. The duties of customs, for the purpose of this dispute, is the aggregate of the basic customs duty and the additional duty of customs and as section 74 of Customs Act, 1962 is thus applicable to the whole of this duty put together, it was improper on the part of lower authorities to disaggregate this. Furthermore, though the appellant had availed CENVAT credit on entry of the capital goods into the premises of the appellant, factum of exports would disentitle them from such availment ab initio. It is in pursuance of such disallowance that the credit so availed was reversed. It may not, therefore, be deemed to have been retained by the appellant at all. There is no justification for withholding of the prescribed percentage of drawback at 98% of the additional duty of customs as held by the two lower authorities - appeal allowed - decided in favor of appellant.
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