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2023 (5) TMI 384 - AT - Central ExciseCENVAT Credit - CVD paid through DEPB Scrip under custom Notification No. 96/2004 dated 17.05.2004 - case of the department is that as per para 4.3.5 of Exim Policy where CVD is paid through DEPB Scrip no benefit of Cenvat Credit shall be admissible - period involved in the present case is January 2005 to December 2011 during such period notification no. 96/2004-Cus dated 17.09.2004 was prevailing - HELD THAT - The relevant para (vi) of the notification makes it clear that the importer shall be entitled to avail cenvat credit of additional duty against the amount debited in DEPB. It is undisputed that all the bills of entry have been assessed under Notification No. 96/2004-Cus dated 17.09.2004 therefore CVD debited in the DEPB under the said notification is available for cenvat credit to the importer - from para 4.3.5 of FTP 2004-09 which was in force during the relevant period of this case i.e. January 2005 to December 2011. The importer is eligible for cenvat credit in respect of additional customs duty paid either in cash or through debit under DEPB therefore in view of the statutory provision the appellant are entitled for the cenvat credit. It is settled that even if the licences were issued under FTP 2000-07 then also the credit cannot be denied so long the imports were made under notification no. 96/2004-Cus which is issued under FTP 2004-09. Moreover in the present case department could not establish that the licenses were issued under FTP 2000-07 for this reason also the proposal for denial of cenvat credit by the revenue is not sustainable. The appellant is entitled for cenvat credit - Appeal of assessee allowed.
Issues Involved:
1. Whether CVD paid through DEPB Scrip under custom Notification No. 96/2004 dated 17.05.2004 is available as Cenvat credit. Summary: Issue 1: Availability of Cenvat Credit for CVD Paid Through DEPB Scrip The department's stance was that per para 4.3.5 of the Exim Policy, CVD paid through DEPB Scrip does not qualify for Cenvat credit as it is not considered a cash payment. The appellant imported raw materials and paid customs duty through DEPB under Notification No. 96/2004-Cus and similar notifications, and claimed Cenvat credit. The Commissioner dropped seven show cause notices but confirmed four, denying Cenvat credit due to a lack of evidence showing that licenses were issued under the new policy. Appellant's Arguments: The appellant argued that all show cause notices admitted the goods were cleared under Notification No. 96/2004-Cus, which explicitly allows Cenvat credit for CVD debited under DEPB. The old FTP 2002-2007, which was abolished, should not apply. Even if it did, it was amended to allow Cenvat credit for CVD paid through DEPB. The imports were assessed under Notification No. 96/2004-Cus, and the CVD payment through DEPB should be considered as duty payment in cash, as clarified by Board Circular No. 26/2007-Cus. Respondent's Arguments: The Respondent reiterated the grounds of the appeal and the findings of the impugned order. Tribunal's Findings: The Tribunal noted that during the relevant period (January 2005 to December 2011), Notification No. 96/2004-Cus was in effect, which allows Cenvat credit for CVD debited in DEPB. The Tribunal found that the imports were made under Notification No. 96/2004-Cus, and the licenses' issuance date (whether under the old or new policy) did not affect the eligibility for Cenvat credit. The Tribunal referred to judgments such as CCE Vs. Neel Kanth Rubber Mills and M/s. Havells India Ltd., which supported the appellant's position that Cenvat credit is allowable regardless of the policy under which the DEPB licenses were issued. Conclusion: The Tribunal concluded that the appellant is entitled to Cenvat credit and allowed the assessee's appeal while dismissing the revenue's appeal.
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